-
The Economic Cooperation Potential of East Asia’s RCEP Agreement East Asian Economic Review Pub Date : 2022-03-31 Shiro Armstrong,Peter Drysdale
-
Rise of Geopolitics and Changing Korea and Japan Trade Politics East Asian Economic Review Pub Date : 2022-03-31 Byung-il Choi,Jennifer S. Oh
-
Forecasting KOSPI Return Using a Modified Stochastic AdaBoosting East Asian Economic Review Pub Date : 2021-12-31 Sangil Bae,Minsoo Jeong
-
Fiscal Policy and Redistribution in a Small Open Economy with Aging Population East Asian Economic Review Pub Date : 2021-12-31 Yongseung Jung
-
Strategic Portfolio Building in Donors’ Multilateral Institutional Choice East Asian Economic Review Pub Date : 2021-12-31 Baran Han
-
The Economics of Conflict and Cooperation in the Asia-Pacific: RCEP, CPTPP and the US-China Trade War East Asian Economic Review Pub Date : 2021-09-30 Cyn-Young Park,Peter A. Petri,Michael G. Plummer
The Regional Comprehensive Economic Partnership (RCEP) agreement, signed in November 2020, comes shortly after the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force and the US-China Trade War escalated. We use a computable general equilibrium model to assess the long-term effects of these three developments on income, trade, economic structure, factor
-
Financial Market Integration and Income Inequality East Asian Economic Review Pub Date : 2021-06-30 Jae Wook Jung,Kyunghun Kim
Over the past decades, financial markets have been integrated across countries while income inequality has increased in most countries. This paper studies the effect of financial market integration on income inequality and investigates whether this effect varies with the degree of financial market development. We find empirical evidence that financial market integration and financial market development
-
Does Inward Foreign Direct Investment Affect Productivity across Industries in Korea? East Asian Economic Review Pub Date : 2021-06-30 Yong Joon Jang
This paper empirically examines whether and how inward foreign direct investment (FDI) affected industrial productivity in Korea during the 2000-2016 period, based on dynamic panel data of inflow FDI on an arrival basis from 427 manufacturing industries. The paper adds to the literature by analyzing whether both technology spillovers and industrial restructuring from inward FDI can differ according
-
The COVID-19 and Stock Return Volatility: Evidence from South Korea East Asian Economic Review Pub Date : 2021-06-30 Dong-Jin Pyo
This study examines the impact of the number of coronavirus cases on regime-switching in stock return volatility. This study documents the empirical evidence that the COVID-19 cases had an asymmetric effect on the regime of stock return volatility. When the stock return is in the low volatility regime, the probability of switching to the high volatility regime in the next trading day increases as the
-
The Motivating Role of Sentiment in ESG Performance: Evidence from Japanese Companies East Asian Economic Review Pub Date : 2021-06-30 Ngoc Bao Vuong,Yoshihisa Suzuki
The paper investigates investor sentiment’s role in boosting Japanese companies to enhance their environmental, social, and corporate governance (ESG) performance. Using ESG scores of 367 firms between 2005 and 2019 from the ASSET4 database, we find that negative sentiment in the previous year, both firm and market level, can be a stimulation for the company’s commitments to its ESG activities next
-
Non-Tariff Trade Policy in the Context of Deep Trade Integration: An Ex-Post Gravity Model Application to the EU-South Korea Agreement East Asian Economic Review Pub Date : 2021-03-31 Julia Grübler,Oliver Reiter
Many different approaches and databases have been developed for the evaluation of nontariff measures (NTMs) and free trade agreements (FTAs). This paper is devoted to the EUSouth Korea agreement, which is the first ‘second-generation’ FTA of the EU, addressing a wide array of non-tariff policies. We review the evolution of NTM types applicable to the EU-South Korea trade relationship and the role of
-
Minimum Wages and Firm Exports: Evidence from Vietnamese Manufacturing Firms East Asian Economic Review Pub Date : 2021-03-31 Dong Xuan Nguyen
This paper investigates the relationship between the minimum wage and firm’s export behavior by using firm-level data of Vietnamese manufacturing enterprises over the period 2010 through 2015. In this regard, I apply the logistic regression model for the probability of exporting and the differences-in-differences analysis to the data, and find that raising minimum wage standards drive no new exporters
-
Benefits and Spillover Effects of Infrastructure: A Spatial Econometric Approach East Asian Economic Review Pub Date : 2021-03-31 Kijin Kim,Junkyu Lee,Manuel Leonard Albis,Ricardo III B. Ang
This paper estimates the effects of transport (road and rail) & energy and ICT infrastructure (telephone, mobile, and broadband) on GDP growths in neighboring countries as well as own countries. We confirm positive direct contributions of infrastructure, access to Internet, and human capital on economic growth. The spatial panel regression models indicate that there exist positive externalities of
-
Financing COVID-19 Deficits in Fiscally Dominant Economies: Is The Monetarist Arithmetic Unpleasant? East Asian Economic Review Pub Date : 2020-12-31 Martín Uribe
The coronavirus pandemic of 2019-20 confronted fiscally dominant regimes around the world with the question of whether the large deficits caused by the health crisis should be monetized or financed by issuing debt The unpleasant monetarist arithmetic of Sargent and Wallace (1981) states that in a fiscally dominant regime tighter money now can cause higher inflation in the future In spite of the qualifier
-
WTO Reform Priorities post-COVID-19 East Asian Economic Review Pub Date : 2020-12-31 Bernard Hoekman
Although the WTO has fulfilled several key tasks it was set up to do - providing periodic reviews of members' trade policies, resolving disputes, supporting negotiations - with the notable exceptions of the Trade Facilitation and Information Technology agreements, WTO members have not been able to negotiate new rules on "bread and butter" trade policies The importance of doing so was illustrated by
-
The Global Economy after COVID-19 East Asian Economic Review Pub Date : 2020-12-31 Alan Deardorff,Soyoung Kim,Chul Chung
[ ]trade and financial integration/globalization tend to have a positive correlation, as documented in some past studies [ ]the size of outstanding crossborder assets and liabilities is huge, as a result of financial transactions made in past decades [ ]some reversals in capital flows seen during COVID-19 will not affect the size of cross-border assets and liabilities in a major way [ ]financial globalization
-
U.S. Macro Policies and Global Economic Challenges East Asian Economic Review Pub Date : 2020-12-31 Joshua Aizenman,Hiro Ito
-
On the Role of Projected FDI Inflows in Shaping Institutions East Asian Economic Review Pub Date : 2020-12-31 Xiang Gao,Zhenhua Gu,Kees G. Koedijk
Capital inflows have a strong presence that influences destination countries' development of institutions, which can in turn help resuscitate a stopped economy and re-attract capital that was lost during crises such as the recent public health crisis While the previous literature emphasizes the mechanism that foreign investors press or even threaten the local government for change, this paper explores
-
The Reorganization of Global Value Chains in East Asia before and after COVID-19 East Asian Economic Review Pub Date : 2020-12-31 Sébastien Miroudot
This paper provides empirical evidence on the reorganization of GVCs in East Asia, highlighting that structural trends explain a decrease in the fragmentation of production after 2011 but that it is not the result of rising trade costs along the value chain Using harmonized inter-country input-output tables, the paper first analyzes the global import intensity of production to document changes in the
-
Minimum Wages and Wage Inequality in the OECD Countries East Asian Economic Review Pub Date : 2020-09-30 Dong-Hee Joe,Seongman Moon
This paper investigates the impact of the effective minimum wage, defined as the log difference between the minimum and the median wages, on wage inequalities in the OECD countries. Unlike the previous studies that focus on single countries in which the minimum wage has no cross-sectional variation and rely instead on within-country variations of wage distribution across regions or socio-economic characteristics
-
Estimating State-Level Matching Efficiencies in the Indian Labor Market East Asian Economic Review Pub Date : 2020-09-30 Woong Lee,Soon-Cheul Lee
We analyze state-level matching efficiencies in the Indian labor market using stochastic frontier analysis. The key contribution of this research is the estimation of matching efficiencies at the state level because these can be used for a state-level measure of labor market conditions. Next, we explore the relationship between the estimated matching efficiencies and population density, labor market
-
The Optimal Degree of Reciprocity in Tariff Reduction East Asian Economic Review Pub Date : 2020-09-30 Pao-Li Chang
This article clari es the roles played by trade policy, in contrast with iceberg transport cost, in the popular setting of Melitz (2003), and characterizes the optimal reciprocal trade policy in such a setting. I show that import tariffs and iceberg transport cost are not equivalent in the strength of their trade- restricting effects and their welfare implications. With all the conflicting effectsof
-
An Adverse Social Welfare Effect of Quadruply Gainful Trade East Asian Economic Review Pub Date : 2020-09-30 Oded Stark, Grzegorz Kosiorowski
Acknowledging that individuals dislike having low relative income renders trade less attractive when seen as a technology that integrates two economies by merging separate social spheres into one. We define a “trembling trade” as a situation in which gains from trade are less than losses in relative income, with the result that global social welfare is reduced. We show that a “trembling trade” can
-
Foreign Exchange Rate Uncertainty in Korea East Asian Economic Review Pub Date : 2020-06-30 Seojin Lee
Applying Ismailov and Rossi (2018), I newly construct the Korea FX uncertainty based on the density distribution of historical forecast errors. This uncertainty index properly captures the rare but significant events in the Korean currency market and provides information distinct from other uncertainty measures in recent studies. I show that 1) FX uncertainty arising from unexpected depreciation has
-
The Health Impact of, and access to, New Drugs in Korea East Asian Economic Review Pub Date : 2020-06-30 Frank R. Lichtenberg
We perform an econometric assessment of the role that pharmaceutical innovation— the introduction and use of new drugs—has played in improving the health of Koreans, by investigating whether diseases for which more new drugs were launched had larger subsequent increases in longevity and smaller subsequent increases in hospitalization. Drugs launched during 1993-2012 are estimated to have increased
-
Maximum Likelihood Estimation of Continuous-time Diffusion Models for Exchange Rates East Asian Economic Review Pub Date : 2020-03-31 Seungmoon Choi, Jaebum Lee
Five diffusion models are estimated using three different foreign exchange rates to find an appropriate model for each. Daily spot exchange rates expressed as the prices of 1 euro, 1 British pound and 100 Japanese yen in US dollars, respectively denoted by USD/EUR, USD/GBP, and USD/100JPY, are used. The maximum likelihood estimation method is implemented after deriving an approximate log-transition
-
Cross-Border Asset Pledgeability for Enhanced Financial Stability East Asian Economic Review Pub Date : 2020-03-31 Gongpil Choi
Even with the sizable Foreign Exchange (FX) holdings and good credit ratings of its top assets, Asia remains vulnerable to various shocks. This paper highlights the limited crossborder asset pledgeability as a significant factor for the lingering vulnerability in Asia. The dichotomy in asset holdings between pledgeable FX and non-pledgeable domestic assets in major economies in Asia has been the source
-
Inspecting Driving Forces of Business Cycles in Korea East Asian Economic Review Pub Date : 2019-12-31 Yongseung Jung
-
-
Declining Fixed Investment and Increasing Financial Investment of Korean Corporations East Asian Economic Review Pub Date : 2019-12-31 Daehwan Kim, Sunhee Kwon, Jai-Won Ryou
This paper aims to determine factors causing the stagnation of Korean firms’ fixed investment after the global financial crisis, using panel data for the period of 1999-2016. Fixed investment remained sensitive to cash flow and Tobin’s q although their effects decreased after the global financial crisis. A decreasing trend of cash flow and an increase in Tobin’s q since the early 2000’s imply that
-
Cultural Exchange and Its Externalities on Korea-Africa Relations: How Does the Korean Wave Affect the Perception and Purchasing Behavior of African Consumers? East Asian Economic Review Pub Date : 2019-12-31 Haggai Kennedy Ochieng, Sungsoo Kim
The Korean wave has become a global phenomenon whose effect has been widely studied in Asia, Europe and the US. However the presumption of cultural distance makes it appear unlikely that the Korean wave could gain traction among African consumers of cultural products. As such, a dearth of evidence exists on the effects of the wave in Africa. This paper examines the effect of the wave in East African
-
International Outsourcing, Unemployment and Welfare: A Re-Examination East Asian Economic Review Pub Date : 2019-09-30 Jai-Young Choi,Eden S. H. Yu
-
Reconnecting the Dots for the Payment Service Directive 2 - Compatible Asian Financial Network East Asian Economic Review Pub Date : 2019-09-30 Gongpil Choi, Meeyoung Park
Unlike the popular belief, digital transformation mainly gets stymied by legal and regulatory issues related with legacy institutions in Asia rather than technical difficulties. The real challenges triggered by the PSD2 (Payment Services Directive 2) are how the region would overcome the overly fragmented, centralized, and hierarchical legacy framework to allow necessary changes to respond to the digital
-
A Review of International Risk Sharing for Policy Analysis East Asian Economic Review Pub Date : 2019-09-30 Pilar Poncela, Michela Nardo, Filippo M. Pericoli
This paper offers a comprehensive view of international risk sharing and of related policy issues from the perspective of the European Union. The traditional analyses contemplate three risk-sharing channels: the capital markets channel (through cross border portfolio investments), international transfers and the credit markets channel (via savings). Comparative analyses reveal that, on average, about
-
Impact of Public Information Arrivals on Cryptocurrency Market: A Case of Twitter Posts on Ripple East Asian Economic Review Pub Date : 2019-06-30 Samet Gunay
Public information arrivals and their immediate incorporation in asset price is a key component of semi-strong form of the Efficient Market Hypothesis. In this study, we explore the impact of public information arrivals on cryptocurrency market via Twitter posts. The empirical analysis was conducted through various methods including Kapetanios unit root test, Maki cointegration analysis and Markov
-
Estimating the Knowledge Capital Model for Foreign Investment in Services: The Case of Singapore East Asian Economic Review Pub Date : 2019-06-30 Gnanaraj Chellaraj,Aaditya Mattoo
-
Specialization, Firm Dynamics and Economic Growth East Asian Economic Review Pub Date : 2019-06-30 Jaehan Cho, Zhizhuang Ge
Productivity in agriculture or services has long been understood as playing an important role in the growth of manufacturing. In this paper we present a general equilibrium model in which manufacturing growth is stimulated by non-manufacturing sectors that provides goods used in both research and final consumption. The model permits the evaluation of two policy options for stimulating manufacturing
-
The Relationship Between Financial Condition and Business Cycle in Mongolia East Asian Economic Review Pub Date : 2019-06-30 Gan-Ochir Doojav, Munkhbayar Purevdorj
This paper examines the interactions between financial conditions and business cycles in Mongolia, a small open economy, heavily depending on commodity exports. We construct two financial conditions indexes based on the reduced form IS model and the vector autoregression (VAR) model as surveillance tools to quantify the degree of the financial conditions. We find that real short-term interest rate
-
Determinants of Trade Flows and Trade Structure between Korea and ASEAN East Asian Economic Review Pub Date : 2019-03-31 Hoan Quang Truong, Chung Van Dong, Hoang Huy Nguyen
Our paper contributes to existing literature by empirically investigate the trade structure and trade performance between Korea and ASEAN. Overall, trade activities between Korea and almost major ASEAN economies have significantly focused on capital goods, medium and high technology goods, while the remaining ASEAN countries’ exports over Korea have been mainly primary and low technology goods. There
-
High-Skilled Inventor Emigration as a Moderator for Increased Innovativeness and Growth in Sending Countries East Asian Economic Review Pub Date : 2019-03-31 Jisong Kim, Nah Youn Lee
This study investigates the effect of high-skilled inventor emigration rate on growth rate of the country of origin (COO). Inventor emigrants represent the human capital that can generate highly innovative work. The social network they form spurs knowledge diffusion and technology transfer back to their COOs, which in turn affects innovation and growth in their home countries. We run dynamic panel
-
Research Productivity in Business and Economics: South Korea, 1990-2016 East Asian Economic Review Pub Date : 2019-03-31 Jang C. Jin
This paper ranks higher education in Korea based upon research productivity in business and economics disciplines. The number of SCI-level journal articles are tabulated using the Web of Science search engine, over the sample period from 1990 to 2016. The league table shows that many private universities dominate top-tier ranks, which is consistent with the school reputations most commonly cited by
-
Foreign Exchange Return Predictability: Rational Expectations Risk Premium vs. Expectational Errors East Asian Economic Review Pub Date : 2018-12-31 Seongman Moon
We propose a simple identification scheme for the causes of the violations of uncovered interest parity. Our method uses the serial dependence patterns of excess returns as a criterion for judging performance of economic models. We show that a mean reverting component in excess returns, representing a violation of uncovered interest parity, mainly contributes to generating different serial dependence
-
Sensitive Sectors in Free Trade Agreements East Asian Economic Review Pub Date : 2018-12-31 Alan V. Deardorff
This paper documents the presence of Osensitive sectorsO in Free Trade Agreements, defined as sectors for which the within-FTA tariffs remain positive. The paper includes some brief theoretical discussion of the welfare implications of these, but the main emphasis is on reporting two measures of this phenomenon for countries in FTAs that entered into force between 1994 and 2003. One measure is the
-
The Effect of Quantitative Easing on Inflation in Korea East Asian Economic Review Pub Date : 2018-12-31 Min-Ho Nam
This paper evaluates the whole impact of quantitative easing on inflation in Korea implemented by the central banks in four major advanced economies, the U.S., Euro Area, U.K. and Japan. According to the analysis employing a VAR-X model with the security holdings of those central banks an exogenous variable, quantitative easing is estimated to exert downward pressures on inflation in Korea. Considering
-
Monetary Policy Rule under Inflation Targeting in Mongolia East Asian Economic Review Pub Date : 2018-12-31 Hiroyuki Taguchi, Erdenechuluun Khishigjargal
This article aims to review the monetary policy rule under inflation targeting framework focusing on Mongolia. The empirical analysis estimates the policy reaction function to see if the inflation targeting has been linked with a monetary policy rule emphasizing on inflation stabilization since its adoption in 2007. The study contributes to the literature by examining the linkage between Mongolian
-
Redefining Liquidity for Monetary Policy* East Asian Economic Review Pub Date : 2018-09-30 Kyunghun Kim, Il Houng Lee, Won Shim
This paper proposes a monetary aggregate "Liquidity" that could serve as a useful indicator for gauging the appropriateness of monetary policy. If liquidity rises above a certain threshold, it is signaling that monetary policy is losing traction due to structural and other impediments even when the inflation gap remains open. This indicator supplements the financial cycle approach but adds value by
-
Dissecting Gains from Trade: Changes in Welfare Cost of Autarky* East Asian Economic Review Pub Date : 2018-09-30 Paras Kharel
Amid a general rise in protectionism and a trade war between the world's two largest economies, this paper analyzes changes in gains from trade for the world over a decade marked by rapid global economic integration preceding the global financial crisis of 2007-08. It employs state-of-the-art quantitative trade models based on the gravity equation to estimate autarky gains from trade, as well as a
-
Exchange Rate Pass-through, Nominal Wage Rigidities, and Monetary Policy in a Small Open Economy East Asian Economic Review Pub Date : 2018-09-30 Hyuk-Jae Rhee, Jeongseok Song
This paper discusses the design of monetary policy in a New Keynesian small open economy framework by introducing nominal wage rigidities and incomplete exchange rate pass-through on import prices. Three main findings are summarized. First, with the existence of an incomplete exchange rate pass-through and nominal wage rigidities, the optimal policy is to seek to minimize the output gap, the variance
-
‘Behind-the-Border’ Regulatory Policies and Trade Agreements* East Asian Economic Review Pub Date : 2018-09-30 Bernard Hoekman
A consequence of global trade liberalization is that domestic regulatory policies have become a focal point for efforts to reduce the costs of engaging in cross-border production and exchange. This article discusses the general challenges of reducing trade frictions created by regulatory differences, focusing specifically on the role trade agreements might play in addressing regulatory spillovers.
-
A Comparison Analysis of Monetary Policy Effect Under an Open Economy Model East Asian Economic Review Pub Date : 2018-06-30 Keun Yeong Lee
The paper analyzes and compares the effects of domestic monetary policy using DSGE, DSGE-VAR, and VAR based on a two-country open economy model of...
-
Post-TPP Trade Policy Options for ASEAN and its Dialogue Partners: “Preference Ordering” Using CGE Analysis East Asian Economic Review Pub Date : 2018-06-30 Xianbai Ji, Pradumna B. Rana, Wai-Mun Chia, Changtai Li
Trump’s withdrawal from the Trans-Pacific Partnership (TPP) and his “America First” trade agenda ignite a second round of interest in mega-free trade agreements in the Asia-Pacific. Countries are evaluating alternative trade policy actions in a post-TPP era. Using national real GDP gains estimated by a modified GTAP model to construct “preference ordering” for 10 Association of Southeast Asian Nations
-
Does Monetary Policy Regime Determine the Nature of the Money Supply?: Evidence from Seven Countries in the Asia-Pacific Region East Asian Economic Review Pub Date : 2018-06-30 Hee-Yul Chai, Sang B. Hahn
This paper tests empirically the causal relationship between bank loans and the monetary base before and after the adoption of inflation targeting in seven Asia-Pacific countries using Toda-Yamamoto Granger non causality test and the bootstrap test for causality. The most striking finding is that the bank loans Granger cause the monetary base during the inflation targeting period in all the countries
-
Benign Neglect or Malign Select?: Entry Cost to GATS/WTO East Asian Economic Review Pub Date : 2018-06-30 KeukJe Sung
WTO was established in 1995 and as many as 36 new members joined WTO until December 2017. Thus it would be interesting to see if new members have committed higher or lower levels of market opening compared to the original members. In this regard, a sophisticated scoring scheme is needed to quantify market opening commitments. After proper econometric model is established for the original members, same
-
Harmonization of Rules of Origin: An Agenda for Plurilateral Cooperation? East Asian Economic Review Pub Date : 2018-03-31 Bernard Hoekman, Stefano Inama
This article discusses the deadlock in the WTO on multilateral harmonization of non-preferential rules of origin (RoO) and reviews some of the RoO included in recent preferential trade agreements. We argue that there is a trend towards adoption of similar approaches and that this suggests that cooperation to reduce the trade-impeding effects of differences in RoO across jurisdictions is more feasible
-
Economic Policy Uncertainty in the US: Does It Matter for Korea? East Asian Economic Review Pub Date : 2018-03-31 Seojin Lee
Using the indicators of economic policy uncertainty developed by Baker et al. (2016), this paper investigates the effects of the US economic policy uncertainty on the Korea economic uncertainty as well as Korea-US foreign exchange risk. The key findings are that: (i) the degree of spillovers of policy uncertainty from the US to Korea is considerable but not comparatively high; (ii) the US policy uncertainty
-
Equivalence between Increasing Returns and Comparative Advantage as the Determinants of Intra-industry Trade: An Industry Analysis for Korea East Asian Economic Review Pub Date : 2018-03-31 Honggue Lee
A two-part model is estimated to see if increasing returns and comparative advantage are empirically equivalent in explaining intra-industry trade. The model has separate mechanisms for determining the occurrence and the extent of intra-industry trade. Estimation is based on an augmented Grubel-Lloyd index derived from the data set on SITC 7 goods at the 3-digit SITC (Revision 4) for country pairs
-
Quantifying the Comprehensive and Progressive Agreement for Trans-Pacific Partnership East Asian Economic Review Pub Date : 2017-12-31 Dan Ciuriak, Jingliang Xiao, Ali Dadkhah
We assess the outcomes for the negotiating parties in the Trans-Pacific Partnership if the remaining eleven parties go ahead with the agreement as negotiated without the United States, as compared to the outcomes under the original twelve-member agreement signed in October 2016. We find that the eleven-party agreement, now renamed as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
-
Declining Japanese Yen in the Changing International Monetary System East Asian Economic Review Pub Date : 2017-12-31 Eiji Ogawa, Makoto Muto
The US dollar has kept as a position of key currency in the global economy in the changing international monetary system where the euro was introduced to some states of the EU in 1999. It is an evidence of inertia of the US dollar as a key currency. Our previous study (Ogawa and Muto, 2017b) conducted empirical analysis to investigate effects of several events on inertia of the US dollar. One of our
-
Gravity with Intermediate Goods Trade East Asian Economic Review Pub Date : 2017-12-31 Sujin Jang, E. Young Song
This paper derives the gravity equation with intermediate goods trade. We extend a standard monopolistic competition model to incorporate intermediate goods trade, and show that the gravity equation with intermediates trade is identical to the one without it except in that gross output should be used as the output measure instead of value added. We also show that the output elasticity of trade is significantly
-
Regional Relative Price Disparities and Their Driving Forces East Asian Economic Review Pub Date : 2017-09-30 Eu Joon Chang, Young Se Kim
This paper studies the long-run behavior of relative price dispersion among cities in Korea with a special emphasis on heterogeneous transitional patterns of price level dynamics. Formal statistical tests indicate considerable evidence for rejecting the null of relative price level convergence among the majority of cities over the sample period of 1985-2015. The analysis of gravity model suggests that