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September/October 1996, 
Vol. 78, No. 5
Posted 1996-09-01

Are Prices Countercyclical? Evidence from East Asian Countries

by Yang-Woo Kim

Recent controversy in macroeconomics research concerns the cyclical behavior of prices. The author uses quarterly data for Korea and Taiwan to show that the price level has moved countercyclically in both countries, while the inflation rate has been procyclical. These results are consistent with post-WWII experience in the G-7 countries.