The trend of low commodity prices looks to continue. Such a trend will affect small open economies that are heavily commodity import dependent, such as the economy of South Korea. Hence, it is of interest to see how the economy would have performed differently with changes in the imported...

The real price of oil has exhibited a series of dramatic changes over the last 40 years. Figure 1 plots the price of West Texas Intermediate crude oil per barrel deflated by the U.S. consumer price index, for the period from 1950 to 2011. In the 1970s and the early 1980s, the real price of oil...