The KAEA is soliciting nominations for the Young Scholar Award and Maekyung-KAEA Economist Award. Please send a letter of nomination with supporting materials to the award committee chair:

E-mail submission is preferred. Deadline for submission is November 10, 2007. Please refer to the AWARD page for a detailed description of the award and the nomination procedure.

There are some major changes in the Maekyung-KAEA Economist award.

Nominating Committee - President Yong Kim nominated the following members to serve as the members of the nominating committee (NC) this year:

Tellers - President Yong Kim also nominated the following members to serve as tellers:

Eligibility: Memebers must be either lifetime members, or annual members in both 2006 and 2007 to vote and/or to be nominated for any position. The annual membership dues for 2007 must have been received by the Treasurer by September 30, 2007. Four positions in the Executive Committee, president elect, vice president, treasurer, and executive secretary (three year term), should be elected this year.

Time Table: The NC plans to announce its selection of candidates on or before October 15, 2007. Alternative candidates may be submitted to the NC by 3% or more of eligible members within 10 days of the NC's announcement. Ballots will be mailed out to eligible voters a few days after the closing of nomination process. Ballots must be returned and received by the teller(s) within 30 days of mailing ballots.

If you have any suggestions or recommendations, please contact the chair of the NC, Professor Suk Hi Kim, ink@udmercy.edu, by October 10, 2007.

The current Advisory Board will nominate candidate(s) for an at-large position of the Advisory Board to replace Professor Yung Y. Yang, whose term expires this year. Please send your suggestions by October 10, 2007, to the chair of the AB, Professor Soo Bin Park at Carelon University, sbpark@ccs.carleton.ca.

Travel Support for Korean Ph.D. Students in Economics

The KAEA is very pleased to announce that it will provide a financial support for Korean doctoral students in Economics who will participate in the job market at the 2008 ASSA meeting in New Orleans.

Eligibility - The student must be a Ph.D. candidate in economics at a university in the U.S. or Canada, who is expected to graduate by August 2008 and actively participates in the job market this year. The student who is fully funded by any other source of funds or has received the KAEA travel support in 2007 will not be qualified.

Travel subsidy - The KAEA plans to pay $200-$300 to each student, depending on the number of qualified applicants. The maximum number of awards is 30. The student should pick up the check in person at the New Orleans meeting in January, 2008. Specific time and place for the pick-up will be e-mailed to each of the recipients by December 10, 2007.

To apply - Please send your name, e-mail address, telephone number, address, the name of your university, and the field of specialization to:

The annual meeting of KAEA will be held in New Orleans on January 4-6, 2008. You can see the preliminary program at ASSA/KAEA Program. Detailed information about the Business Meeting and Panel discussion will be added as soon as it beomes available, which will be either late November or early December. But, notice the time for each event and adjust your travel plan if you wish to participate.

This year's AB/EC meeting will be held on Jaunuary 3 (Thursday) from 5:30-8:30. All incoming and outgoing EC members and AB members are asked to participate. As in the past two years, the Maekyung-KAEA forum will follow the AB/EC meeting from 8:30-10:30 in the same room.

Professor Semoon Chang has organized two sessions at the Southern Economic Association meeting in New Orleans. The two sessions are:

Monday 8:00 - 9:45 a.m. KAEA Session 16A
Issues on the South Korean Economy

Session Chair: James M. Lister, Korea Economic Institute

Presenters and Discussants:

Inchul Kim, Sung Kyun Kwan University, "The Convergence of Currency Regimes in East Asia"
Discussant: Sung Y. Kwack, Howard University

Sung Y. Kwack, Howard University, Young Sun Lee, Yonsei University, Heeseon Choi, Korea Institute of Technology and Trade, "Gender Earning Gaps and Return to Schooling in Korea"
Discussant: Yong J. Yoon, George Mason University

Bun Song Lee, Northwestern State University, Young Hyun Kim, Daegu and Kyungbuk Development Institute, Sun Eae Chun, Chung-Ang University, "An Analysis of the Effects of Korean Governmen's Housing Policies on Prices of Apartments in Seoul: A Hedonic Price Index Approach"
Discussant: Yoonbai Kim, University of Kentucky

Yong J. Yoon, George Mason University, ""Publicness and Smith's Extent of the Market Theorem"
Discussant: Bun Song Lee, Northwestern State University

Monday 10:00 - 11:45 a.m. KAEA Session 16B
Issues on the North Korean Economy

Session Chair: James M. Lister, Korea Economic Institute

Presenters and Discussants:

Youn Suk Kim, Kean University, "Prospects for the North Korean Economy"
Discussant: Semoon Chang, University of South Alabama

Yong J. Yoon, George Mason University, "Human Disaster in the Maximalist State"
Discussant: Youn Suk Kim, Kean University

Semoon Chang, University of South Alabama, "Patterns of North Korea?s Global Trade"
Discussant: Sun Eae Chun, Chung-Ang University

Patara Thumrongvit, University of Kentucky, Yoonbai Kim, University of Kentucky, "Financial Development and Economic Growth"
Discussant: Inchul Kim, Sung Kyun Kwan University

The KIF/KAEA/KAFA annual conference was successfully held at the KIF building in Seoul on May 28th, 2007. The title of the symposium was "Financial Innovation and Recent Trends in the Banking Industry and Capital Markets."

The first topic on banking industry was presented by two KAFA members: Professor K. Park on the Korean banking performance and Professor Y. Park on the mortgage markets. Professor K. Park compared the performance of regional and national banks in Korea by examining differential profitability during 1992-2004 and found that economic growth, exchange rate, efficiency, and non-performing loans are important determinants of profitability for both regional and national banks. Professor Y. Park examined the model risks due to innovations in mortgage markets in valuing mortgages and mortgage-backed securities and suggested that the model risks contributed large losses to mortgage market participants during bond market rallies.

The second topic on capital markets was presented by a KAEA member, a KAFA member, and a research fellow at the KIF. Professor Y. Kim from KAEA added the bond market to bank and stock markets to study the role of financial development on economic growth and found that only government bonds are positively related to economic growth. The second speaker Professor S. Chung from the KAFA addressed lessons from hedge fund failure identifying important statistics attributed to failed hedge funds and concluded that both quantitative and qualitative due diligence are equally important in monitoring hedge fund risk exposure. The last speaker, Dr J. Koo from the KIF examined the predictability of option pricing models. He found that a mixture of two lognormal models performs well for out-of-the money options, while the Edgeworth expansion dominates other models for in-the-money options.

The conference offered a unique opportunity to both U.S. academics and Korean practitioners and researchers sharing fruitful knowledge on the financial and banking industries. The KIF president, H. Choe proposed reviewing more recent developments in the banking realm as a theme for the next year's symposium.

See the entire KIF/KAEA/KAFA PROGRAM.

Both sessions were held on Monday, July 2 in Adams. Session 172 was from 2:30 to 4:15 pm and Session 199 from 4:30 to 6:15 pm. Each session had three papers.

Session 172 was chaired by Professor Yong H. Kim, President of Korea-America Economic Association.

The first paper, "The Implications of the U.S.-Korea Free Trade Agreement: A General Equilibrium Approach" by Renan Zhuang (North Dakota State University) and Won W. Koo (North Dakota State University) was presented by Professor Koo. The paper documents the nature and extent of trade liberalization between the United States and Korea and uses computable general equilibrium model to estimate the impact of the FTA, if implanted as negotiated, on a few sectors of the economy in several regions of the world as well as in the two countries.

The second paper, "Time Preference and Time Use: Do Smokers Exercise Less?" by Younghwan Song (Union College), was presented by the author. The paper first links the smoking behavior of individuals to their time preference and then shows that current smokers, who have higher time preference, spend more time watching television and eating and drinking but less time exercising and taking classes, compared to never smokers by using US survey data.

The third paper, "Nonlinear Phillips curve, NAIRU and monetary policy rules" by Hyeon-seung Huh (Yonsei University) and Namkyung Lee (Yonsei University), was presented by Ms. Lee. The paper analyzes U.S. data from 1954 to 2001 first to estimate the Phillips curve by using logistic smooth transition autoregression (LSTAR) specification and then to compute the implied NAIRU (non-accelerating inflation rate unemployment) rate and to suggest some optimal monetary policy rules.

Session 199 was chaired by Professor Hyeon-seung Huh, Secretary of Korea Economic Association.

The first paper, "Shrinking Middle Class and Income Distribution of Korea: 1995-2005" by Joon-Woo Nahm (Sogang University), was presented by the author. The paper shows the middle class, defined by using several alternative measures for robustness, has declined and households in this group moved into lower and upper class about equally. The paper reports detailed figures on year-to-year transition among the three income classes.

The second paper, "Industrial Policy and Rent-Seeking During the Developing Years in Korea" by Byung Hee Soh (Kookmin University), was presented by the author. The paper identifies and classifies various socio-economic-political environments from the First to the Sixth Republic and link the rent-seeking behavior of the political power to the supplier of corruption a la Shleifer and Vishny and to the types of bandits of Olson.

The third paper, "Gender Discrimination: The Self-Employed vs. Wage Earners" by Jin Hwa Jung (Seoul National University), Kang-Shik Choi (Yonsei University), and Eun-young Shim (Yonsei University), was presented by Ms. Shim. The paper analyzes 1998-2003 Korean Labor and Income Panel Survey for earnings differentials by gender for those who are either self-employed or wage earners after controlling various worker/job characteristics. After gender gaps are estimated, they are decomposed into productivity-related and customer-related (discriminatory) parts.

After each paper was formally discussed by the organizer, the presenters were given their opportunities to answer concerns and questions from the discussant and session participants.

The participants and friends of both KAE and KAEA were then invited to dinner at Shilla Restaurant. Thanks to the generous treat by the KAEA president, we enjoyed good Korean dishes and entertaining conversations.

P.S. Professor Yong H. Kim, President of KAEA, had more than good conference sessions and Korean dinner. After dinner, unbeknownst to all but a couple of dinner guests, while others strolled back to the conference hotel, he went to the Virginia Mason Hospital emergency room for his chest pain and subsequently had EKG, stress test, angiogram, and ultimately an endovascular stent surgery. He did not leave his heart in Seattle; he instead took an artery supporting device from this beautiful city.

See the previous newsletter for the list of all participants.

The 4th BOK/KAEA conference was held on July 6, 2007 at the BOK Main Conference Room, Bank of Korea, Seoul, Korea. Dr. Kyung-Soo Kim, the BOK Assistant Governor and the Director General of the Institute for Monetary and Economic Research of BOK, welcomed the KAEA members and paper presenters and promised to continue cooperation with the KAEA in joint research and conference in the future. Prof. Joon Park, President-Elect of KAEA, also attended the conference.

Three papers were presented by two KAEA members, Prof. Tae-Hwy Lee and Dr. Jinill Kim, and one BOK member, Dr. Byoung Hark Yoo. Prof. Lee examined how one can use information in the entire yield curve to improve forecasts of output growth and inflation. Dr. Kim's paper studied Tobin's proposition that inflation greases the wheels of the labor market. Dr. Yoo proposed a new money demand function in a New Keynesian model where money demand depends not only on output and interest rates but also on house prices.

After the conference, the dinner was hosted by Dr. Yang Woo Kim, the Senior Deputy Director General of the Institute of Monetary and Economic Research of BOK.

See the entire BOK/KAEA PROGRAM.

The 5th KDI-KAEA Conference was held on July 9th at the KDI Main conference Hall. The title of the conference was "Enhancing Productivity and Sustaining Growth," and there were six sessions on the topics of Issues of Productivity Growth, Economic Integration and FTA, Foreign Ownership and Firm Size and Corporate Performance, Macroeconomic Issues, Tax Reform, and Financial Market Issues. Seven members of the KAEA made presentations, while two members originally in the program were not able to join the conference due to personal reasons.

Dr. Shim Sang Dal at the KDI emphasized that this year's conference has a particular meaning because as of 2006 Korea Development Review has been listed at the Korea Research Foundation, a national organization dedicated to social and scientific development through the promotion of scientific research. Selected papers presented at the conference will be published at this journal. President Hyun of the KDI hosted a nice reception and lunch for the participants.

See the entire KDI/KAEA PROGRAM.