This paper sets up a small open economy TANK model with constrained households to address the driving forces of business cycles in Korea. The estimated model via Bayesian methodology shows that nearly half of households have lacked access to financial markets before the Asian financial crisis....

This paper sets up a small open economy TANK model with constrained households to address the driving forces of business cycles in Korea. The estimated model via Bayesian methodology shows that nearly half of households have lacked access to financial markets before the Asian financial crisis....

This paper sets up a new Keynesian model with external habit to explore the role of each shock over business cycles in Korea. The estimated model via maximum likelihood shows that the productivity shock plays a pivotal role in explaining the output variations before and after the financial...