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AbstractThis study investigates the effect of news and noise shocks of US monetary policy on economic fluctuations in emerging market economies. In the first part of our two‐step estimation method, the news and noise shocks of US monetary policy are estimated using dynamic structural vector autoregression identification. In the second step, the impact of the news and noise shocks on macro variables reflecting the business cycle (e.g., production, consumption, investment and trade balance) is examined using local projection. Our empirical results show no significant differences in the responses to both shocks at the early stage, when news and noise are not separable. However, when the monetary policy becomes known, emerging market economies enter a full‐scale recession with respect to a news shock of raised US interest rates. Meanwhile, emerging market economies enter an economic boom phase of the business cycle when the shock turns out to be noise. Fluctuations driven by noise are likely to incur greater costs than normal economic fluctuations because the former are out of sync with the fundamentals.

AbstractThis paper examines the effect of domestic monetary policy on capital flows after controlling for the effect of conventional push factors (global factors). We conduct a time‐varying coefficient vector autoregressive (TVC‐VAR) model analysis using monthly data (January 2010–July 2019) from Korea. Our empirical results show that an expansionary monetary policy shock has a short‐run (1‐ and 3‐month) negative impact on gross inflows to the equity market, which is the main driver of gross capital inflows to Korea. This negative effect increases throughout the sample period. Monetary policy easing is also associated with a decrease in outflows of equity, representing a reversal of Korean residents' foreign equity investment as the domestic policy rate decreases. This effect dampens the negative impact on gross capital inflows, which leads to mild responses of net capital inflows in the short run. We also find a clear relationship between the level of the policy rate and its impact on gross capital inflows. The lower the policy rate, the greater the negative impact of the expansionary monetary policy shock on gross capital inflows. This time‐varying effect reflects difficulties that many emerging market economies, including Korea, face in setting monetary policy when policy rates are low.

In recent decades, extreme storm events due to climate change have frequently occurred worldwide, a few of which have even occurred consecutively; we class such rainfall events as mega events. That is to say, if the inter-arrival time between rainfall events with a 100-year frequency is less than the IETD (Inter-Event Time Definition), the event can be considered a mega event. Therefore, the aim of this study was to implement flood inundation analysis using the hypothetical mega event from two consecutively occurring events of 100-year frequency, and select the optimal shelters using a developed method for minimizing casualties from floods. The Gyeongan stream basin, which is a tributary of the Namhan River in Korea, was selected as the study area. This study calculates mega flood discharge using the SSARR (Stream Synthesis and Reservoir Regulation) model, and conducts a flood inundation analysis of mega floods via the level pool method and the HEC-GeoRAS model. An inundation map was constructed, and the inundated area was classified into three zones and five administrative districts. Sixteen shelters were selected as candidates based on the criteria of the local government safety management plans and the Guidelines for Establishing the Disaster Relief Plan of 2013. To evaluate the candidates for evacuation in each district, we selected seven evaluation indicators from the shelter criteria of several countries, and calculated the weights of the indicators using the Analytic Hierarchy Process (AHP) method. As a result, four optimal shelters were selected in the study area. The results of the study can be used as the basic information for analyzing mega natural disaster events and inundation, and for establishing evacuation shelters, which are one of the non-structural flood protection measures.