Journal of Economic Theory and Econometrics: Journal of the Korean Econometric Society

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Journal of Economic Theory and Econometrics
Journal of the Korean Econometric Society

Journal of Economic Theory and Econometrics (JETEM) is a peer-reviewed, internet-based, open-access international journal aiming to publish high-quality papers in all areas of economics. JETEM is the official publication of the Korean Econometric Society, carrying papers written either in English or in Korean. In this web-site, all articles are fully downloadable free of charge

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Recently Published Articles

Volume 32, Issue 3 (September 2021)

Abstract | PDF (945 kilobytes)

No abstract is available for this article.

Basics and Recent Advances in Regression Discontinuity: Difference versus Regression Forms, Pages 1–68

Jin-young Choi, Myoung-jae Lee

Abstract | PDF (648 kilobytes)

This paper reviews the basics of regression discontinuity (RD) design, whose hallmark is having a treatment determined by an underlying score (i.e., ‘running variable’) crossing a known cutoff or not. Following the basics, recent advances in RD are examined, where the topics are grouped into those related to score and those not. The former topics include multiple scores, measurement errors in score, integer score, and score-density continuity. The latter topics include regression kink (RK), high-order effects, and extending RD identification range (i.e., external validity). Detailed empirical examples are provided for the RD topics, but not for the RD basics which are fairly well-known these days. RD is simple, which can thus appeal even to lay audiences, and this review accordingly emphasizes the intuitive nature of RD and its applicability in practice. Practical and widely applicable techniques are given more coverage, whereas theoretically-motivated but less-practically-relevant ones are only briefly mentioned. The beauty of RD is in its simplicity, and temptation to make it too sophisticated should be resisted.

Tax Avoidance and Excess Burden of Income Tax, Pages 69–93

Sanghyun Hwang, Kadir Nagac

Abstract | PDF (163 kilobytes)

Our main objective in this paper is to show that income taxation creates an extra burden or distortion when tax avoidance is available. We present a labor supply model with endogenous asset portfolio choice and show that tax avoidance by trading assets impacts labor supply response and total excess burden of income tax. In our model individuals are allowed to change their asset portfolio to reduce their tax liabilities, and this distortion is the main source of the higher efficiency cost in our model. Furthermore, we show that ignoring the avoidance responses leads to biased results when estimating the labor supply distortion and welfare cost of a tax reform. Progressivity of a given tax system is predicted to be less than the formal tax code due to tax avoidance through tax arbitrage.

A Canonical Constant Elasticity of Substitution (CES) Production Function, Pages 94–102

Ki-Hong Choi, Sungwhee Shin

Abstract | PDF (112 kilobytes)

We propose a canonical form of the CES production function. It includes the normalized CES function as a special case. It can represent factor-augmenting technological progresses through the factor efficiency term. In general, it can represent a family of CES-type function indexed by a parameter. The parameter may represent time, nations, regions, or industries. Finally, it treats well the concern on dimensional homogeneity.

Analysis on Relationship Between Export and Productivity of Manufacturing Industry: Using Plant Level Data, Pages 103–134

Wonhyeok Kim, Yoonsoo Lee, Jin Ho Park

Abstract | PDF (28 kilobytes)

The Korean economy experienced a slowdown in both productivity growth and exports in the 2010s. Here we analyze the relationship between changes in exports and in the growth of total factor productivity (TFP). Our empirical analysis of data from the Mine and Manufacturing Survey (2000 ∼ 2017) shows that there is a positive relationship between exports and productivity. We find that the positive relationship was stronger during periods in which exports decreased. We find that while the decrease in exports may have slowed or reduced the growth in productivity, the increase in exports did not necessarily increase productivity since 2000. We focus on the irreversibility of inputs as a possible explanation of the asymmetric relationship between exports and productivity growth. Our results show that in the input-inelastic sectors in which inputs are not flexibly adjusted, productivity declined further as export growth decreased.


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