In September, industrial and services production, retail sales, facility investment and construction investment rose. In October, job growth was even stronger while inflation speeded up. In September, all industry production grew 1.1 percent month-on-month (up 2.8% y-o-y) as industrial production (up 1.8% m-o-m and up 3.0% y-o-y) and services production (up 0.4% m-o-m and up 2.2% y-o-y) climbed from a month earlier. In September, retail sales (up 0.2% m-o-m and down 1.9% y-o-y), facility investment (up 8.7% m-o-m and down 5.7% y-o-y) and construction investment (up 2.5% m-o-m and up 14.5% y-o-y) all rose month-on-month. In October, exports turned positive (from down 4.4% to up 5.1% y-o-y) thanks to growth in automobiles, vessels and petroleum products. Average daily exports jumped by 7.6 percent from a year ago to US $2.62 billion. In October, the consumer sentiment index (CSI) fell by 1.6 points month-on-month to 98.1. The business survey index (BSI) for all industries decreased 3 points from a month ago to 70 and the BSI outlook for November fell 4 points to 69. In September, the cyclical indicator of the coincident composite index decreased by 0.1 points monthon-month, and the cyclical indicator of the leading composite index increased by 0.1 points. In October, the economy added 346 thousand jobs year-on-year and the unemployment rate fell 0.3 percentage points to 2.1 percent. In October, consumer prices rose at a faster pace (from up 3.7% to up 3.8% y-o-y), the CPI excluding the food and energy sectors rose by 3.2 percent, and the index excluding the agricultural and petroleum products rose by 3.6 percent. The index of the cost of basic necessities rose by 4.6 percent. In October, stock prices fell, the won weakened and Korean Treasury bond yields rose affected by rising US Treasury yields and political instability in the Middle East. In October, housing prices rose at a slower pace (from up 0.25% to up 0.20% m-o-m), while Jeonse (lump-sum deposits with no monthly payments) prices increased faster (from up 0.32% to up 0.36% m-o-m). Amid the recent moderation in inflation, uncertainties still surrounded the Korean economy owing to supply factors. Signs of economic recovery are beginning to appear, as indicated by the rebound in manufacturing production and exports, including semiconductors, and continued improvements in services production and employment. Internationally, alongside the prospect of the global IT industry’s growth and a surge in tourists visiting Korea, concerns remain over the prolonged high interest rates. At the same time, uncertainties linger as the political unrest in the Middle East in addition to the Russia-Ukraine war exacerbates the volatility of commodity prices. The government plans to meticulously manage risks at home and abroad as well as improve its fundamental economic structure while placing its top priority on stabilizing prices and households’ livelihoods and ramping up the country’s domestic consumption, investment and exports.

The North Korean Economic Research Forum in November highlighted a paradigm shift in the global perception of North Korean issues. Previously confined to intra-peninsular concerns, these issues now significantly influence international geopolitics. This change is largely attributed to North Korea's role in the reconfigured global order, especially following the Russia-Ukraine and Israel-Hamas conflicts, where North Korea’s armament support has emerged as a sailent factor. The journal offers a nuanced analysis of the intensifying Russia-North Korea relations post Russia's Ukraine incursion, scrutinizing the dynamics and limits of their military cooperation. It also insightfully assesses the impact of the Russo-North Korean anti-American alliance on the evolving global diplomatic landscape, particularly in relation to the Israel-Palestine conflict. Additionally, the issue examines the expanding scope of Korean Studies Abroad, underscoring its crucial role in elevating Korea’s global profile, propelled by the Korean Wave and Korean language education. Focusing on Vietnam as a case study, it explores the growth of Korean Studies and its integration with Korean unification diplomacy. The analysis stresses the need to move beyond Korea's policy-driven support, advocating for a self-sustaining academic framework and enhanced professionalism through specialized personnel development and international exchanges. This approach is vital for deepening global understanding of Korean peninsula issues and inter-Korean relations.

The Effectiveness of Capital Controls and Macroprudential Measures / Junyong Lee, Kyounghun Lee, and Frederick Dongchuhl Oh We review the literature on the effectiveness of capital controls and macroprudential measures. First, we explain the purposes and examples of capital controls and macroprudential policies. We then analyze various theoretical models and empirical findings from prior studies that investigate the effectiveness of each instrument. Moreover, we review several studies that directly compare the two instruments and discuss whether policymakers should implement capital controls or macroprudential measures to overcome financial crises. Finally, based on a discussion of the findings of previous studies, we suggest several possible avenues for future research. From Miracle to Mediocrity? Explaining the Growth Slowdown of the Korean Economy / Duyong Kang and Sungkeun Park To investigate the causes of Korea’s growth slowdown over the past thirty years, we estimate the contributions of major developmental factors, including i) demographic factors (changes in population growth and workforce age due to the demographic transition), ii) quality-of-liferelated choice factors (changes in working hours, education, and the female employment rate), iii) structural change, and iv) the effects of productivity catch-up. Our estimates show that these four groups of factors account for approximately 90 percent of the growth slowdown, with demographic factors contributing approximately 30 percent and the other three groups of factors each contributing about 20 percent. We also show that the same factors explain most of Korea’s high growth in the 1980s. These results suggest that Korea’s growth slowdown is basically a consequence of its successful economic development and that the high growth and subsequent slowdown can be regarded as a single process. In addition, given that the factors examined here exhibit similar patterns of change in the course of economic development of most countries, we think that our estimation results of the relationship between economic development and changes in economic growth trends could have more general implications that go beyond Korea’s experience. 전세가격의 비용화와 소비자물가지수: 소비자물가지수 자가주거비 반영을 중심으로 / 오지윤 The Conversion of Chonsei into Monetary Costs and its Relationship with the Consumer Price Index / OH,Jiyoon The Chonsei component holds the highest level of weight (5.4%) in the composition of the Korean consumer price index (CPI). The variations in Chonsei prices are directly reflected in the CPI as a representation of cost swings. The Chonsei refers to a deposit that accumulates the costs related to housing services and is mostly affected by variations in rental rates. Nevertheless, it is important to note that Chonsei prices are also susceptible to fluctuations in interest rates, regardless of the rent prices. Therefore, if Chonsei were directly and one-to-one indexed to the CPI, they could include changes other than residential service prices. After analyzing the time series data of the Chonsei index and rent index inside the CPI, it becomes apparent that the Chonsei index displays an average annual growth rate of 2.3%, whilst the rent index reveals a growth rate of 0.9%. The observed disparity in growth rates indicates a divergence in trends between the two indices. It is posited that the Chonsei index, when capitalized, has had a more rapid increase compared to the rental index, owing to the gradual drop in interest rates. To effectively reflect fluctuations in the housing service costs, proxies for the Chonsei index were utilized in the construction of a consumer price index. The findings of our study suggest that, overall, the newly developed CPI demonstrates a comparatively lower rate of inflation when compared to the official CPI. Furthermore, the inclusion of imputed rents for owner-occupied housing in CPI amplifies this effect.