The Impact of Uncertainty Shocks: Evidence from Geopolitical Swings on the Korean Peninsula*

PurposeThis study aims to measure economic uncertainty in Turkey by a novel economic uncertainty index (EUI) employing principal component analysis (PCA). We assess the impact of Covid-19 pandemic in Turkey with our constructed uncertainty index.Design/methodology/approachIn order to obtain the EUI, this study employs a dimension reduction method of PCA using 14 macroeconomic indicators that spans from January 2011 to July 2020. The first principal component is picked as a proxy for the economic uncertainty in Turkey which explains 52% of total variation in entire sample. In the second part of our analysis, with our constructed EUI we conduct a structural vector autoregressions (SVAR) analysis simulating the Covid-19-induced uncertainty shock to the real economy.FindingsOur EUI sensitively detects important economic/political events in Turkey as well as Covid-19-induced uncertainty rising to extremely high levels during the outbreak. Our SVAR results imply a significant decline in economic activity and in the sub-indices as well. Namely, industrial production drops immediately by 8.2% and cumulative loss over 8 months will be 15% on average. The losses in the capital and intermediate goods are estimated to be 18 and 25% respectively. Forecast error variance decomposition results imply that uncertainty shocks preserve its explanatory power in the long run, and intermediate goods production is more vulnerable to uncertainty shocks than overall industrial production and capital goods production.Practical implicationsThe results indicate that monetary and fiscal policy should aim to decrease uncertainty during Covid-19. Moreover, since investment expenditures are affected severely during the outbreak, policymakers should impose investment subsidies.Originality/valueThis is the first study constructing a novel EUI which sensitively captures the critical economic/political events in Turkey. Moreover, we assess the impact of Covid-19-driven uncertainty on Turkish Economy with a SVAR model.

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Mesoscale Spatial Variability of Linear Trend of Precipitation Statistics in Korean Peninsula

Advances in Meteorology ◽

10.1155/2016/3809719 ◽

2016 ◽

Vol 2016 ◽

pp. 1-15 ◽

Cited By ~ 3

Author(s):

Jaehyeon Lee ◽

Jaehyun Ahn ◽

Eunsoo Choi ◽

Dongkyun Kim

Keyword(s):

Spatial Variability ◽

Korean Peninsula ◽

Temporal Trend ◽

Linear Trend ◽

Kendall Test ◽

Characteristic Scale ◽

Management Plans ◽

The Impact ◽

Mean Variance ◽

Approximate Characteristic

This study analyzed the spatial variability of the linear trend of the precipitation mean, variance, lag-1 autocorrelation coefficient, and probability of dryness (PD) based on the precipitation data between 1981 and 2015 observed at 65 rain gages located across Korean Peninsula. While the result of the Mann-Kendall test based on the yearly statistics showed no temporal trend at most of the gage locations, the same test based on the 20-yearly statistics showed that statistically significant temporal trend exists at 54% (mean), 60% (variance), 61% (autocorrelation), and 61% (PD) among the total 65 rain gages. In addition, this study produced the map of the linear trend of the precipitation statistics. The map showed a clear regional and seasonal tendency implying that the impact of the climate change varies significantly within Korea. The variogram analysis revealed that the approximate characteristic scale of linear trend of hourly and daily precipitation statistics ranges between 50 km and 200 km and between 100 km and 250 km, respectively. This characteristic scale is significantly smaller than the spatial scale of atmospheric circulation, which suggests that future water resources management plans of Korea should consider this mesoscale variability that otherwise can be missed if it is based only on the GCM simulation results.

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The Impact of Uncertainty Shocks

10.3386/w13385 ◽

2007 ◽

Cited By ~ 17

Author(s):

Nicholas Bloom

Keyword(s):

Uncertainty Shocks ◽

The Impact

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The Impact of US and China on ROK–DPRK Relations, 1993–2019

Asian Survey ◽

10.1525/as.2021.1439545 ◽

2021 ◽

pp. 1-28

Author(s):

Alec Chung ◽

Ki Eun Ryu

Keyword(s):

Statistical Analysis ◽

Power Distribution ◽

Korean Peninsula ◽

Great Powers ◽

Event Data ◽

The Us ◽

The Impact ◽

The Relationship

The relationship between the ROK and DPRK is bound to be affected by the two great powers—the US and China. Especially in recent decades, the power gap between the two great powers has continued to narrow. Given this, how is the geopolitical situation surrounding the Korean Peninsula shaping inter-Korean relations? This study uses event data and statistical analysis to explore the geopolitical factors that shaped inter-Korean relations from 1993 to 2019. We find that DPRK–ROK relations deteriorated as the power gap between the US and China narrowed. Also, inter-Korean relations were positive when DPRK–US relations were positive. In short, we conclude that during the shift in the US–China power distribution, maintaining positive DPRK–US relations while also managing inter-Korean relations peacefully is necessary for peace on the Korean Peninsula.

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The Impact of Energy Market Uncertainty Shocks on Energy Transition in Europe

The Energy Journal ◽

10.5547/01956574.40.si1.mbal ◽

2019 ◽

Vol 40 (01) ◽

Author(s):

Mehmet Balcilar ◽

David Roubaud ◽

Muhammad Shahbaz

Keyword(s):

Energy Transition ◽

Energy Market ◽

Market Uncertainty ◽

Uncertainty Shocks ◽

The Impact

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The Korean Nuclear Imbroglio: Can India be a Muted Spectator?

Artha - Journal of Social Sciences ◽

10.12724/ajss.47.2 ◽

2018 ◽

Vol 17 (4) ◽

pp. 17-34

Author(s):

Sitakanta Misra

Keyword(s):

East Asia ◽

Nuclear Weapons ◽

Korean Peninsula ◽

North Korea ◽

Spillover Effects ◽

North Asia ◽

Perceived Security ◽

The Impact

The presence of nuclear weapons in North Korea has complicated the strategic scenario in North Asia in general and Korean peninsula in particular. Unless the perceived ‗security deficit‘ with North Korea, due to its nuclear weapons‘ programme is amicably addressed, especially by reducing America‘s dominant presence in the region, demanding North Korea‘s denuclearisation would be unrealistic. Thus, the nuclear imbroglio in Korean Peninsula would endure. The outcomes of the Korean crisis will have serious spillover effects on South and East Asia. As a ‗rising‘ super power, India needs to reflect on her role in the unfolding strategic scene in its extended neighbourhood. This article provides an analysis of the strategic condition India is in and the impact of intervening in nuclear issues involving Super Powers in South and East Asia.

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Impacts of Upstream Structures on Downstream Discharge in the Transboundary Imjin River Basin, Korean Peninsula

Applied Sciences ◽

10.3390/app10093333 ◽

2020 ◽

Vol 10 (9) ◽

pp. 3333

Author(s):

Doan Thi Thu Ha ◽

Seon-Ho Kim ◽

Deg-Hyo Bae

Keyword(s):

River Basin ◽

Korean Peninsula ◽

Water Levels ◽

Dam Failure ◽

Water Release ◽

Transboundary River Basin ◽

Operational Rule ◽

Dam Operation ◽

Effective Use ◽

The Impact

The transboundary river basin is a great challenge for water management and disaster reduction due to its specific characteristics. In this study, upstream impacts from natural and artificial sources on the downstream discharge on the Imjin river basin, the well-known transboundary region in the Korean peninsula, were evaluated using a hydrological model integrating a dam operation module at an hourly timescale. The module uses a concept of the AutoROM method as the operational rule to update the dam storage and decide water release. Dam storages were translated into water levels using a water level–storage curve. To quantify the impact of hydraulic structures on the Northern Imjin river basin, change in discharge was analyzed in four flood events (2009, 2010, 2011, and 2012). Dam failure scenarios were developed under conditions of the 2010 flood event, in which the releases of 100%, 80%, 50%, and 20% of water storage of Hwanggang dam were simulated. The results indicate that the amount of water released from upstream dams is the main cause of floods in the downstream region. To reduce the risk of floods in the downstream river basin, an optimal dam operation module and information on upstream dams play an important role and contribute to the effective use of water resources.

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