Macroeconomic Effects of Maritime Transport Costs Shocks: Evidence from the South Korean Economy

In the aftermath of COVID-19 pandemic, dramatic increase in maritime transport costs might potentially exert detrimental impacts on macroeconomy, especially for countries that heavily rely international trade their consumption and production activities. Our study employs a small open economy DSGE (Dynamic Stochastic General Equilibrium) model to analyze impact South Korean where are considered as key factors impacting law one price. Positive shocks costs, according impulse response function, have positive repercussions Consumer Price Index (CPI), terms trade, nominal exchange rates, interest but can negatively affect real output rate. To verify validity our model, we utilize Vector autoregression with exogenous variables (VARX) examine dynamic relationship between macroeconomic variables, based quarterly data from first quarter 2002 fourth 2022. The results VARX coincide those model. findings underline importance macroeconomy hold substantial implications design selection policies mitigate such shocks.