South Korea Monthly Index

Korean EPU Data                         Korean Categorical EPU Data

We are pleased to host several indexes of economic policy uncertainty for South Korea developed by Dooyeon Cho and Husang Kim.

Cho and Kim construct several policy uncertainty indexes for South Korea based on articles in the following newspapers: Donga-ilbo, Hankyoreh, Kyunghyang Shinmun, The Korea Times, Maeil Economic Daily, Korea Economic Daily, Chosun-ilbo, JoongAng Daily, Kukmin Daily, Munhwa-ilbo, Seoul Shinmun Daily, Sekye-ilbo, Seoul Economic Daily. They source articles from January 1990 to December 2021 from the "Bigkinds" digital archives managed by the Korea Press Foundation.

Their index construction methodology closely follows the procedure in Baker, Bloom, and Davis (2016). First, they count articles that contain at least one term in each of their (E) Economy, (U) Uncertainty, and (P) Policy categories. Second, they divide the raw counts by the total number of articles in the same newspaper and month to obtain scaled frequency counts. Third, they standardize each newspaper's scaled EPU counts to a unit standard deviation for the period from January 1990 to December 2020. Fourth, they average the standardized series across newspapers by month to obtain their overall monthly Korean EPU index. Finally, they multiplicatively normalize the resulting EPU index to an average value of 100 from January 1990 to December 2020.

Compared to the EPU index for South Korea developed by Baker et al. (2016), Cho and Kim use more newspapers (13 rather than 6) and a richer set of keywords. For example, they include "concern" as a term in the U category, because "concern" is often used to indicate uncertainty in Korean. Other examples include "structural reform" and the "Fed," which Cho and Kim include in their P set but which do not appear in the P set of Baker et al.

In addition, Cho and Kim construct four monthly category-specific policy uncertainty indices that cover i) Monetary policy, ii) Fiscal policy, iii) Trade policy, and iv) Foreign exchange rate policy. For more details about their term sets and index construction, see their paper on the "Macroeconomic Effects of Uncertainty Shocks: Evidence from Korea."

The authors have also constructed annotated graphs illustrating the timeline of Korean EPU and Korean Categorical EPU.