South Korea

Introduction

Policy uncertainty has emerged as a significant factor influencing economic behavior in South Korea, particularly in times of political transition, regulatory shifts, and global economic turbulence. As South Korea’s economy is deeply intertwined with the clarity and consistency of its policy environment, the political discourse often plays a crucial role in shaping economic outcomes.

Uncertainty surrounding fiscal policy, trade agreements, environmental regulations, and monetary decisions can lead to delays in investment, fluctuations in consumer confidence, and changes in hiring patterns. Events such as elections, legislative reforms, or shifts in governance often contribute to heightened levels of uncertainty.

To systematically monitor and quantify this phenomenon, we develop a South Korea-specific Economic Policy Uncertainty (EPU) index based on the frequency of relevant terms in leading national newspapers. This index serves as a proxy for the perceived uncertainty within the policy landscape and provides valuable insight into how political discourse and media coverage reflect and potentially influence economic sentiment.

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