## wp1702

## Source details

**Canonical URL:** [wp1702](https://www.imf.org/-/media/files/publications/wp/wp1702.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/wp/wp1702.pdf.md)
- [Structured JSON version](/-/media/files/publications/wp/wp1702.pdf.json)

---

### I. INTRODUCTION
- Korea and Japan share: one of the world’s most rapid aging, the imminent prospect of a declining population, a dramatic fall in potential growth, and a significant slowdown in inflation.
- Japan’s chronology and contributing factors:
  - Burst of stock and real estate bubbles in the early 1990s; annual growth fell from an average 4 percent (post-1973 oil shock) to an average of 1½ percent between 1991 and 1994.
  - Recovery aided by aggressive policy rate cuts and successive fiscal stimulus packages.
  - 1997 Asian financial crisis coincided with large nonperforming loans in Japan’s financial system; GDP contracted in 1998 and 1999.
  - Collapse of the global information technology bubble in March 2000; balance-sheet repair strategy put in place in 2002–03.
  - Global financial crisis and global recession hurt export-led growth; short rebound in 2010-11 followed by the 2011 earthquake.
  - Major policy regime change end-2012 (fiscal stimulus, monetary easing, structural reforms) has so far been unable to lift inflation to the 2 percent target.
- Purpose and approach:
  - Compare Korea and Japan on demographics, potential growth, balance sheets, asset prices, and inflation to distill policy implications for Korea.
  - New econometric analysis: extends a traditional Phillips-curve specification to include demographics and indicators of globalization to assess whether globalization and demographics have changed Korea’s inflation process.
  - Key empirical preview: cumulative decline in Korea’s inflation over 2012-15 is almost completely explained by inflation expectations, economic slack, world oil price changes and aging; globalization found not to have had a significant impact. Korea’s projected acceleration in aging is expected to create increasing deflationary pressures in the near future.

### II. STRUCTURAL ISSUES — Demographics and Labor
- Demographic trajectories:
  - Japan: working-age population ratio peaked at 63 percent in 1995 and declined to about 56 percent in 2015.
  - Korea: working-age population ratio projected to peak at 66½ percent in 2017, then fall quickly to 56 percent in less than 20 years.
  - Japan’s population started to contract in 2010; Korea’s population expected to begin decline in 2025–35.
  - Working-age population defined as share of population aged 20–64 in total population; projections based on the United Nations “medium variant scenario.”
- Macroeconomic implications of aging and population decline:
  - Major effects on labor force, savings, investment, growth, current account, and fiscal balances.
  - Potential impacts on labor productivity are ambiguous; empirical evidence is mixed.
  - Population decline will adversely affect domestic demand.
- Potential growth trends:
  - Japan: potential growth plunged from an average 4 percent in the late 1980s to less than 1 percent in the 2000s.
    - Early 1990s decline mainly due to deceleration in capital formation and reduction in total factor productivity growth.
    - Late 1990s weakness driven by weak investment growth and declining labor inputs due to aging.
    - Sluggish investment and productivity growth linked to delayed restructuring and balance sheet repair; "zombie" firms persisted; lending constrained; private investment declined; repeated fiscal stimulus supported the economy.
  - Korea: potential growth fell from a record high of 8 percent in 1991 to 2.9 percent in 2015, reflecting declines in contributions from labor, capital inputs and productivity.
    - Slow restructuring of nonviable firms contributed to productivity slowdown.
    - Going forward, labor input contributions to potential growth expected to shrink based on demographic projections, even assuming a mild increase in participation.

### Productivity and Structural Reform Needs
- Productivity performance:
  - Korea: labor productivity rose at an average annual rate of 5.5 percent in 1990-2011, but stagnated since then; remains only 40 percent of that of the three most productive OECD countries.
  - Japan: labor productivity is about half that of the frontier OECD economies.
  - Sectoral differences: in both countries labor productivity in the service sector is only half that in manufacturing; OECD peers: average productivity relative to manufacturing is 90 percent.
  - Japan: low service-sector R&D—less than 10 percent of business R&D in recent years vs OECD average of 38 percent.
- Regulatory and competitive environment in Korea:
  - Korea’s upstream network sectors show very stringent regulatory environment compared with OECD average and best practices based on OECD product market regulation (PMR) indicators across air, electricity, gas, rail, road, and professional services.
  - Ample room for reforms to boost productivity.
- Illustrative simulation on service sector reform:
  - Methodology: Bourlès et al. (2010) and Jain-Chandra and Zhang (2014).
  - If Korea’s regulatory burden in upstream network sectors were to diminish and reach the average of the three frontier OECD economies by 2025, it could boost annual TFP growth by nearly 0.25 percentage point each year.

### Product market regulation, labor duality, and productivity
- OECD PMR indicators assess entry regulation, public ownership, market structure, and—where relevant—vertical integration.
- Empirical evidence: product market regulatory reform can increase aggregate labor productivity; overregulation in “network” industries can curb competition and efficiency in downstream firms.
- Labor market duality:
  - Korea: share of temporary workers nearly 22 percent in 2014 (proxy for non-regular employees), double the OECD average.
  - Japan: share of non-regular workers grew from 20 percent in the early 1990s to nearly 40 percent.
  - Duality effects: temporary workers have fewer incentives and employers invest less in their development; contributes to inequality and reduced TFP.
- Policy/quantitative scenario:
  - Reforms lowering Korea’s regulatory burden in upstream network sectors to the OECD frontier could boost TFP annual growth by nearly 0.25 percentage point each year.

### Balance sheets, household debt, public debt, and asset prices
- Corporate debt:
  - Japan: over 140 percent of GDP in the 1990s; about 100 percent of GDP in 2015 after deleveraging and restructuring.
  - Korea: corporate debt just over 100 percent of GDP (current), with sectoral strains in shipbuilding, shipping, and petrochemicals.
  - Policy lesson: importance of expeditiously recognizing NPLs and strengthening balance sheets.
- Household debt:
  - Japan: household debt to GDP fairly steady at 65–70 percent.
  - Korea: household debt rose from 40 percent of GDP in the early 1990s to nearly 90 percent of GDP today.
  - Policy recommendations for Korea:
    - DTI cap of 60 percent should be gradually tightened toward 30 to 50 percent.
    - Extend DTI cap to other types of household debt (including “group loans”).
    - Harmonize prudential regulations across banks and nonbanks.
- Public sector balance sheets:
  - Japan: public debt to GDP rose from 70 percent in 1990 to around 250 percent in 2015.
  - Korea: public debt less than 40 percent of GDP in 2015; authorities’ projections suggest it could reach 60, or even 100, percent of GDP by 2060 due to population aging and slowing growth.
  - Implication: Korea has fiscal space to incentivize and cushion short-term adverse impacts of structural reforms.
- Asset prices and macroprudential policy:
  - Both countries experienced sharp housing price corrections in the 1990s.
  - Korea introduced LTV and DTI regulations (introduced in 2002 and 2005, respectively) and macroprudential measures that helped avoid excessive housing price appreciation.
  - Korea’s stock market more buoyant than Japan’s; Japan’s equity prices remain about 40 percent of their end-1989 peak.
  - Recommendation: continue macroprudential policies to prevent asset-price bubbles.

### Inflation, demographics, globalization, and econometric results
- Korea’s recent inflation dynamics:
  - Average headline inflation plunged from 4 in 2011 to around 1 percent in 2013, and below the authorities’ target since late 2012.
  - Korea’s core inflation ~2 percent in 2014 and 2015 (some moderation in 2016); core inflation remained more robust than headline due to declining fuel and energy prices.
  - Share of consumption items with negative inflation rose from less than 20 percent in 2012–13 to 30-40 percent in mid-2015 (mostly fuel-related); in Japan the fraction rose from <10 percent in 1990-91 to 50 percent at end-1995 and comprised multiple product groups.
- Hypothesis tested: whether demographics (aging) and globalization contributed to lower inflation.
- Model and estimation:
  - Extended Phillips-curve specification for 13 economies over 1990-2015: Australia, Canada, China, France, Germany, Hong Kong SAR, Italy, Japan, Korea, New Zealand, Singapore, United Kingdom, United States.
  - Estimation method: Seemingly Unrelated Regression to account for correlated residuals across countries.
  - Dependent variable: annual average inflation rate.
  - Regressors: expected inflation, domestic output gap, world oil price changes, old-age dependency ratio, population growth (in some specs), trade openness, global output gap; most parameters vary across countries, while demographic and globalization coefficients assumed common.
- Key estimated coefficients for Korea (selected):
  - Constant: -1.21 (P-value 0.01)
  - Expected inflation: 1.33 (P-value 0.00)
  - Output gap: 0.15 (P-value 0.04)
  - Global oil price (lagged): 0.02 (P-value 0.01)
  - Old dependency: -0.10 (P-value 0.03)
  - Adjusted R-squared: 0.8
- Regression inference:
  - Expected inflation, output gap, world oil price changes, and the old-age dependency ratio are significant with expected signs.
  - Population growth and globalization indicators (trade openness, global output gap) are not statistically significant in most specifications.
- Decomposition for Korea, cumulative change in inflation over 2012–15:
  - Cumulative change over 2012–15: 3.3 percentage points (explained almost fully by model factors).
  - Contribution breakdown:
    - Decline in world oil price: 0.6 percentage points.
    - Economic slack: 0.3 percentage points.
    - Increase in the old dependency ratio: nearly 0.2 percentage points.
  - Change in expected inflation played a major role (implicit in decomposition).
- Aging and future inflation:
  - Historically, aging changes were more disinflationary in Japan than in Korea; going forward, Korea will face more disinflationary pressure because Korea is still aging rapidly while Japan is already aged.
  - Aging could contribute to a further decline in the inflation rate by 0.3 percentage points over the next five years.
- Policy implication: ensure inflation expectations remain well anchored; structural reforms to raise fertility could help reduce deflationary pressure from aging.

### Conclusions and policy implications
- Korea vs Japan: similar challenges in rapid population aging, declining population prospects, and lagging productivity due to structural problems. Differences: Korea has stronger corporate and public sector balance sheets but needs firm restructuring of nonviable firms.
- Key policy priorities for Korea:
  - Progress with restructuring weaker nonviable firms and sectors (e.g., shipbuilding, shipping, petrochemicals).
  - Reduce labor market duality to boost productivity and inclusive growth.
  - Promote more competition in the service sector and reduce regulatory burdens in upstream network sectors (potential TFP gains of nearly 0.25 percentage point each year if brought to OECD frontier).
  - Use fiscal space actively to incentivize reforms and cushion short-term adverse impacts.
  - Maintain and strengthen macroprudential policies to guard against asset-price bubbles.
  - Monetary policy should keep expectations anchored in the face of downward inflationary pressure from aging.
  - Structural policies to raise the fertility rate would mitigate deflationary pressure over time.

*Source: wp1702 (IMF staff estimates and analysis).*

### References .............................................................................................................

### wp1702 - References

### I. INTRODUCTION
- Korea’s demographic trends and economic environment have sparked comparisons with the Japanese economy, with shared issues: one of the world’s most rapid aging, the imminent prospect of a declining population, a dramatic fall in potential growth, and a significant slowdown in inflation.
- Japan’s “lost decades” chronology and contributing factors:
  - Burst of stock and real estate bubbles in the early 1990s led to economic stagnation: annual growth, which had averaged 4 percent since the 1973 oil shock, fell to an average of 1½ percent between 1991 and 1994.
  - Recovery aided by aggressive policy rate cuts and successive fiscal stimulus packages.
  - 1997 Asian financial crisis hit while Japan’s financial system still carried large nonperforming loans; mistrust among financial institutions escalated, triggering large-scale failures and a credit crunch; GDP contracted in 1998 and 1999.
  - Collapse of the global information technology bubble in March 2000; a comprehensive strategy for balance-sheet repair in the corporate and banking sector was finally put in place in 2002–03.
  - Global financial crisis and associated global recession hurt export-led growth; short rebound in 2010-11 was followed by the 2011 earthquake.
  - Major policy regime change end-2012 (fiscal stimulus, monetary easing, structural reforms) has so far been unable to lift inflation to the 2 percent target.
- Purpose and approach of the paper:
  - Distill policy implications for Korea by comparing Korea and Japan in demographics, potential growth, balance sheets, asset prices, and inflation.
  - New econometric analysis extends a traditional Phillips-curve specification to include demographics and indicators of globalization to assess whether globalization and demographics have changed Korea’s inflation process.
  - Key empirical preview: the cumulative decline in Korea’s inflation over 2012-15 is almost completely explained by inflation expectations, economic slack, world oil price changes and aging; globalization is found not to have had a significant impact. Korea’s projected acceleration in aging is expected to create increasing deflationary pressures in the near future.

### II. STRUCTURAL ISSUES — Demographics and Labor
- Demographic trajectories:
  - Japan: working-age population ratio peaked at 63 percent in 1995 and declined to about 56 percent in 2015.
  - Korea: working-age population ratio projected to peak at 66½ percent in 2017, then fall quickly to 56 percent in less than 20 years.
  - Korea’s population expected to start shrinking soon, resembling Japan: Japan’s population started to contract in 2010, while Korea’s is expected to begin its decline in 2025–35.
  - Working-age population defined as share of population aged 20–64 in total population; projections based on the United Nations “medium variant scenario.”
- Macroeconomic implications of aging and population decline:
  - Major implications on labor force, savings, investment, growth, and the current account and fiscal balances.
  - Potential impacts on labor productivity are ambiguous; empirical evidence is mixed.
  - Population decline will adversely affect domestic demand.
- Potential growth trends:
  - Japan: potential growth plunged from an average 4 percent in the late 1980s to less than 1 percent in the 2000s.
    - Early 1990s decline mainly due to deceleration in capital formation and reduction in total factor productivity growth.
    - Late 1990s weakness driven by weak investment growth and declining labor inputs due to aging.
    - Sluggish investment and productivity growth linked to delayed restructuring and balance sheet repair; "zombie" firms persisted, lending constrained, private investment declined; repeated fiscal stimulus supported the economy.
  - Korea: potential growth fell from a record high of 8 percent in 1991 to 2.9 percent in 2015, reflecting declines in contributions from labor, capital inputs and productivity.
    - Slow restructuring of nonviable firms contributed to productivity slowdown.
    - Going forward, labor input contributions to potential growth expected to shrink based on demographic projections, even assuming a mild increase in participation.

### Productivity and Structural Reform Needs
- Productivity performance:
  - Korea: labor productivity rose at an average annual rate of 5.5 percent in 1990-2011, but stagnated since then, and remains only 40 percent of that of the three most productive OECD countries.
  - Japan: labor productivity is about half that of the frontier OECD economies.
  - Sectoral differences: in both countries labor productivity in the service sector is only half that in manufacturing, in contrast to OECD peers where average productivity relative to manufacturing is 90 percent.
  - Japan: low productivity in the service sector reflects low level of R&D in the sector—less than 10 percent of business R&D in recent years, well below the OECD average of 38 percent.
- Regulatory and competitive environment in Korea:
  - Korea’s upstream network sectors show very stringent regulatory environment compared with OECD average and best practices based on OECD product market regulation (PMR) indicators; applies across air, electricity, gas, rail, road, and professional services.
  - Indication of ample room for reforms to boost productivity.
- Illustrative simulation on service sector reform:
  - Methodology followed Bourlès et al. (2010) and Jain-Chandra and Zhang (2014).
  - The analysis suggests that if the regulatory burden in Korea’s upstream network sectors were to diminish and reach the average of the three frontier OECD economies by 2025, it could boost annual TFP growth by nearly

*Source: wp1702 - References (content excerpt).*

### 0.25 percentage point each year (Figure 4).

### wp1702 - 0.25 percentage point each year (Figure 4)

### Product market regulation, labor duality, and productivity
- OECD PMR indicators assess: entry regulation, public ownership, market structure, and—where relevant—vertical integration.
- Empirical evidence: product market regulatory reform can lead to higher aggregate labor productivity; overregulation in “network” industries can curb competition and efficiency in downstream firms.
- Labor market duality:
  - Korea: share of temporary workers nearly 22 percent in 2014 (a proxy for non-regular employees), double the OECD average.
  - Japan: share of non-regular workers grew from 20 percent in the early 1990s to nearly 40 percent.
  - Duality effects: temporary workers have fewer incentives and employers invest less in their development; contributes to inequality and reduced TFP.
- Policy/quantitative scenario:
  - Reforms lowering Korea’s regulatory burden in upstream network sectors to the OECD frontier could boost TFP annual growth by nearly 0.25 percentage point each year.

### Balance sheets, household debt, public debt, and asset prices
- Corporate debt:
  - Japan: over 140 percent of GDP in the 1990s; about 100 percent of GDP in 2015 after deleveraging and restructuring.
  - Korea: corporate debt just over 100 percent of GDP (current), with sectoral strains in shipbuilding, shipping, and petrochemicals.
  - Policy lesson: importance of expeditiously recognizing NPLs and strengthening balance sheets.
- Household debt:
  - Japan: household debt to GDP fairly steady at 65–70 percent.
  - Korea: household debt rose from 40 percent of GDP in the early 1990s to nearly 90 percent of GDP today.
  - Policy recommendations for Korea:
    - DTI cap of 60 percent should be gradually tightened toward 30 to 50 percent.
    - Extend DTI cap to other types of household debt (including “group loans”).
    - Harmonize prudential regulations across banks and nonbanks.
- Public sector balance sheets:
  - Japan: public debt to GDP rose from 70 percent in 1990 to around 250 percent in 2015.
  - Korea: public debt less than 40 percent of GDP in 2015; projections by authorities suggest it could reach 60, or even 100, percent of GDP by 2060 due to population aging and slowing growth.
  - Implication: Korea has fiscal space to incentivize and cushion short-term adverse impacts of structural reforms.
- Asset prices and macroprudential policy:
  - Both countries experienced sharp housing price corrections in the 1990s.
  - Korea introduced LTV and DTI regulations (introduced in 2002 and 2005, respectively) and macroprudential measures that helped avoid excessive housing price appreciation.
  - Korea’s stock market has been more buoyant than Japan’s; Japan’s equity prices remain about 40 percent of their end-1989 peak.
  - Recommendation: continue macroprudential policies to prevent asset-price bubbles.

### Inflation, demographics, globalization, and econometric results
- Korea’s recent inflation dynamics:
  - Average headline inflation plunged from 4 in 2011 to around 1 percent in 2013, and below the authorities’ target since late 2012.
  - Korea’s core inflation ~2 percent in 2014 and 2015 (some moderation in 2016); core inflation has remained more robust than headline due to declining fuel and energy prices.
  - Share of consumption items with negative inflation rose from less than 20 percent in 2012–13 to 30-40 percent in mid-2015 (mostly fuel-related); in Japan the fraction rose from <10 percent in 1990-91 to 50 percent at end-1995 and comprised multiple product groups.
- Hypothesis tested: whether demographics (aging) and globalization contributed to lower inflation.
- Model and estimation:
  - Extended Phillips-curve specification for 13 economies (sample: Australia, Canada, China, France, Germany, Hong Kong SAR, Italy, Japan, Korea, New Zealand, Singapore, United Kingdom, United States) over 1990-2015.
  - Estimation method: Seemingly Unrelated Regression to account for correlated residuals across countries.
  - Dependent variable: annual average inflation rate.
  - Regressors: expected inflation, domestic output gap, world oil price changes, old-age dependency ratio (aging indicator), population growth (in some specs), trade openness, global output gap; most parameters vary across countries, while demographic and globalization coefficients assumed common.
- Key estimated coefficients for Korea (selected):
  - Constant: -1.21 (P-value 0.01)
  - Expected inflation: 1.33 (P-value 0.00)
  - Output gap: 0.15 (P-value 0.04)
  - Global oil price (lagged): 0.02 (P-value 0.01)
  - Old dependency: -0.10 (P-value 0.03)
  - Adjusted R-squared: 0.8
- Regression inference:
  - Expected inflation, output gap, world oil price changes, and the old-age dependency ratio are significant with expected signs.
  - Population growth and globalization indicators (trade openness, global output gap) are not statistically significant in most specifications.
- Decomposition for Korea, cumulative change in inflation over 2012–15:
  - Cumulative change over 2012–15: 3.3 percentage points (explained almost fully by model factors).
  - Contribution breakdown:
    - Decline in world oil price: 0.6 percentage points.
    - Economic slack: 0.3 percentage points.
    - Increase in the old dependency ratio: nearly 0.2 percentage points.
  - Change in expected inflation played a major role (implicit in decomposition).
- Aging and future inflation:
  - Historically, aging changes were more disinflationary in Japan than in Korea; going forward, Korea will face more disinflationary pressure because Korea is still aging rapidly while Japan is already aged.
  - Aging could contribute to a further decline in the inflation rate by 0.3 percentage points over the next five years.
- Policy implication: ensure inflation expectations remain well anchored; structural reforms to raise fertility could help reduce deflationary pressure from aging.

### Conclusions and policy implications
- Korea vs Japan: similar challenges in rapid population aging, declining population prospects, and lagging productivity due to structural problems. Differences: Korea has stronger corporate and public sector balance sheets but needs firm restructuring of nonviable firms.
- Key policy priorities for Korea:
  - Progress with restructuring weaker nonviable firms and sectors (e.g., shipbuilding, shipping, petrochemicals).
  - Reduce labor market duality to boost productivity and inclusive growth.
  - Promote more competition in the service sector and reduce regulatory burdens in upstream network sectors (potential TFP gains of nearly 0.25 percentage point each year if brought to OECD frontier).
  - Use fiscal space actively to incentivize reforms and cushion short-term adverse impacts.
  - Maintain and strengthen macroprudential policies to guard against asset-price bubbles.
  - Monetary policy should keep expectations anchored in the face of downward inflationary pressure from aging.
  - Structural policies to raise the fertility rate would mitigate deflationary pressure over time.

*Source: IMF staff estimates and analysis from wp1702 - 0.25 percentage point each year (Figure 4).*

### REFERENCES

### REFERENCES

### Japan: population aging, deflation, and reform
- Anderson, Derek, Dennis Botman, and Ben Hunt, 2014, “Is Japan Population Aging Deflationary?” IMF Working Paper 14/139, (Washington: International Monetary Fund).
- Aoyagi Chie and Giovanni Ganelli, 2013, “The Path to Higher Growth: Does Revamping Japan’s Dual Labor Market Matter?” IMF Working Paper 13/202, (Washington: International Monetary Fund).
- Botman Dennis, Yihan Liu and Niklas Westelius, 2016, “Impact of Demographics on Growth and Inflation in Japan,” IMF Country Report No 16/268.
- Danninger, Stephan and Chad Steinberg, 2015, “Japan’s Growth Challenge: Needs and Potential”, in Botman, Dennis, Stephan Danninger and Jerald Schiff (eds.) “Can Abenomics Succeed?” (Washington, International Monetary Fund).
- Katagiri, M. (2012), “Economic Consequences of Population Aging in Japan: Effects through Changes in Demand Structure”, Institute for Monetary and Economic Studies Discussion Paper No. 2012-E-3.
- Shirakawa M., 2012, “The Bank of Japan’s Efforts to Overcome Deflation,” speech at the Japan National Press Club in Tokyo.
- Syed, Murtaza, Kenneth Kang, and Kiichi Tokuoka, 2009, “Lost Decade in Translation: What Japan’s Crisis Could Portend about Recovery from the Great Recession,” IMF Working Paper 09/282 (Washington: International Monetary Fund).

### Korea: macroprudential policy, household debt, and growth
- Ding, Ding, 2014, “Risks of Excessively Low Inflation in Korea,” International Monetary Fund.
- Ding, Ding, 2016, “Korea—Household Debt,” International Monetary Fund.
- Jain-Chandra, Sonali and Longmei Zhang, 2014, “How Can Korea Boost Potential Output to Ensure Continued Income Convergence?” IMF Working Paper 14/54: (Washington, International Monetary Fund).
- Igan, Deniz and Heedon Kang, 2011, “Do Loan-To-Value and Debt-To-Income Limits Work? Evidence from Korea,” IMF Working Paper 11/297 (Washington: International Monetary Fund).
- Kim Choongsoo, 2013, “Macroprudential Policies: Korea’s Experiences” background paper for the presentation at the IMF Conference “Rethinking Macro Policy II: First Steps and Early Lessons.”
- IMF, 2016, “Republic of Korea—2016 Article IV Consultation”, IMF Country Report No. 16/278.
- OECD, 2016, OECD Economic Surveys: Korea 2016, OECD Publishing, Paris. http://dx.doi.org/10.1787/eco_surveys-kor-2016-en

### Globalization and inflation; international transmission
- Borio, Claudio and Andrew Filardo, 2007, “Globalization and Inflation: New Cross-Country Evidence on the Global Determinants of Domestic Inflation,” BIS Working Papers No 227.
- IMF, 2006, “How has Globalization Affected Inflation?” in World Economic Outlook (Chapter 3), Washington, International Monetary Fund.
- Kamin, Steven B., Mario Marazzi, and J. W. Schindler, 2004, “Is China ‘Exporting Deflation’?” International Finance Discussion Papers No. 791 (Washington: Board of Governors of the Federal Reserve System).
- Berkmen, Pelin and Huidan Lee, 2014, “Deflation Risks: A Comparison with Japan”, presentation for the ECB/IMF Roundtable on Inflation Development un the Euro Area,” International Monetary Fund.

### Productivity, labor markets, and structural reforms
- Ball, Laurence, and Robert Moffitt, 2001, “Productivity Growth and the Phillips Curve,” NBER Working Paper No. 8421 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Bouis, Romain and Romain Duval, 2011, "Raising Potential Growth After the Crisis: A Quantitative Assessment of the Potential Gains from Various Structural Reforms in the OECD Area and Beyond," OECD Economics Department Working Papers 835, OECD Publishing.
- Bourlès, Renaud, Gilbert Cette, Jimmy Lopez, Jacques Mairesse, and Giuseppe Nicoletti, 2010, “Do Product Market Regulations in Upstream Sectors Curb Productivity Growth?: Panel Data Evidence for OECD Countries,” OECD Economics Department Working Papers 791, OECD Publishing.
- Damiani, Mirella, Fabrizio Pompei, and Andrea Ricci, 2011, “Temporary Job Protection and Productivity Growth in EU Economies,” Quaderni del Dipartimento di Economia, Finanza e Statistica 87/2011 (Perugia: University of Perugia).
- Dolado, Juan Jóse, Salvador Ortigueira, and Rodolfo Stucchi, 2011, “Does Dual Employment Protection Affect TFP? Evidence from Spanish Manufacturing Firms,” Economics Working Papers 11–37 (Madrid: Charles III University of Madrid).

### Macroprudential policy and financial stability in Asia
- Zhang, Longmei and Edda Zoli, 2016, “Leaning Against the Wind: Macroprudential Policy in Asia,” Journal of Asian Economics, Volume 42, Issue C.
- Kim Choongsoo, 2013, “Macroprudential Policies: Korea’s Experiences” background paper for the presentation at the IMF Conference “Rethinking Macro Policy II: First Steps and Early Lessons.”
- Igan, Deniz and Heedon Kang, 2011, “Do Loan-To-Value and Debt-To-Income Limits Work? Evidence from Korea,” IMF Working Paper 11/297 (Washington: International Monetary Fund).

### Methods, statistics, and econometric approaches
- Tytell, Irina, and Shang-Jin Wei, 2004, “Does Financial Estimating Seemingly Unrelated Regressions and Tests for Aggregation Bias,” Journal of the American Statistical Association, Vol. 57 (June), pp. 348–68.
- Buiter, Willem H., 2000, “Monetary Misconceptions,” CEPR Discussion Paper No. 2365 (London: Centre for Economic Policy Research).

*Source: wp1702 - REFERENCES*

---


_Source: https://www.imf.org/-/media/files/publications/wp/wp1702.pdf_