Yun Young Gwak

Current Working Papers 

"Sectoral Spillovers in Inflation Dynamics: Evidence from Network Propagation"  (Under review; Accepted at WAMS 2025, OzMac 2025, EWMES 2025)

Distinguishing between sector-specific and aggregate shocks and assessing their contributions to inflation are vital for informed policy. This paper quantifies cross-sectoral spillovers in U.S. consumer price inflation using a factor-adjusted network approach that jointly models aggregate factors and sectoral network propagation. Using disaggregated personal consumption expenditure data across 26 sectors from 1959–2024, the model employs Lasso nuclear-norm regularization to estimate high-dimensional VARs while controlling for aggregate influences. Cross-sectoral spillovers account for roughly two-fifths of total price variation—more than twice the share attributable to aggregate factors—and are systematically mismeasured in conventional models: factor models understate spillovers by absorbing network transmission into common components, while VARs without factors  overstate them by conflating comovement with propagation. The spillover structure is highly granular, dominated by large consumer-facing sectors such as food, furnishings, and services, with gasoline exerting more moderate but persistent effects. Spillovers propagate mainly through backward production linkages and scale with sector size, indicating that large downstream sectors play a disproportionate role in transmitting sector-specific shocks across the price network. The findings underscore the need for integrating sectoral networks and aggregate factors in modeling inflation dynamics and policy design.

"Financial Shocks and Inflation Expectations: Implications for Modern Central Banking" (with Thuy Hang Duong) (Accepted at WiM 2025)

This paper investigates the impact of financial conditions on inflation expectations, with a particular focus on the evolving mandates of central banks since the global financial crisis. As institutions increasingly incorporate financial stability alongside price stability, understanding the interplay between these objectives becomes critical. We seek to answer: How responsive are expectations to financial shocks? And how do monetary policy and financial conditions interact? Using state-dependent local projection methods combined with Kitagawa-Blinder-Oaxaca decompositions, we aim to quantify the marginal effects of financial shocks on inflation expectations, conditional on monetary-financial interactions. The findings will inform whether central banks should more explicitly consider financial conditions in their efforts to manage inflation dynamics.

"Unpacking Global Inflation"  (with James Morley & Benjamin Wong) (Submitted at SNDE 2026)

What causes global inflation and what can monetary policy do about it? This project addresses this fundamental question by examining how global forces shape inflation and exploring their implications for domestic monetary policy in open economies. This study has two aims: (1) to quantify the extent to which global forces influence inflation across countries using dynamic factor models and (2) to understand how monetary policy should respond to these global forces. The primary focus is on the first aim, employing econometric methods to identify and establish causal links between global influences and inflation dynamics. The secondary aim, concerning policy responses, is explored with less emphasis but remains critical in interpreting the results, especially given the recent synchronization of policy rates across central banks worldwide. 

Works in Progress  

Sectoral Phillips Curves  (with Qingyuan Du & Benjamin Wong)   

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Academic experience (T&R)  

Teaching

• Intermediate Macroeconomics, 2024 S1-S2, 2025 S1-S2, Teaching Assistant to Prof Moshe Hazan and Prof Siew Ling Yew  (teaching evaluation)

• Macroeconometrics, 2024 S2, Mentor for Economics Pre-PhD and Honours students  (teaching evaluation not issued)

• Development Economics, Korean Economy, 2022 S2, Teaching Assistant to Prof Doowon Lee  (teaching evaluation not issued)

Research 

• "How important is global r-star for open economies?," Sep 2025-, Research Assistant to Prof Benjamin Wong 

• "Trade Restrictiveness Indices and Non-Tariff Measures," Apr 2025-, Research Assistant to Prof Laura Puzzello

• "Implications of Global forces for Domestic Monetary Policy," Jan-Jun 2024, Research Assistant to Prof Benjamin Wong 

Professional experience, Bank of Korea  

• Economic Research Institute, Financial and Monetary Research Team, 2022

• Research Department, U.S. and Europe Economies Team, Economic Analysis Team, 2020-2022

• International Affairs Department, Regional Organizations Team, 2018-2020

Research at Bank of Korea - working papers

• Park, S., Gwak, Y. and Hwang, N. (2022), "Constraints on the Recovery of Construction Investment: Causes and Effects of Surge in Construction Material Prices," BOK Issue Note 2022-14. https://bit.ly/3Z1XZ8y 

• Park, K., Park, J., Park, S., Lim, J., Kim, C., Lee, J. and Gwak, Y. (2021), "The Macroeconomic Impact of Climate Change Responses” BOK Issue note, 2021-23. https://bit.ly/4fFs46c 

• Lee, K., Gwak, B. and Gwak, Y. (2021), “Fiscal Policies of the Biden Administration,” BOK International Economics Review, 2021-3. https://bit.ly/3kcjoNn   

• Gwak, B. and Gwak, Y. (2021), "Growth differences in the Euro Area after COVID-19," BOK International Economics Review, 2021-1. https://bit.ly/3IeC1bA   

• Gwak, B., Lee, K., Gwak, Y., Kang, B. and Oh, K. (2020), "Unemployment policies in major countries after COVID-19," BOK International Economics Review, 2020-35. https://bit.ly/3lRoa3p   

• Lee, G., Oh, K., Kang, B. and Gwak, Y. (2020), “Evaluating corporate risks after COVID-19,” BOK International Economics Review, 2020-22. https://bit.ly/3Izqyoh  

Honours and Awards  

• Dean's Excellence Award: Unit Prize in Advanced Topics in Microeconomics, 2024

• Monash Graduate Scholarship, Monash International Tuition Scholarship, 2024-2027

• Monash Scholarship for Excellence, 2023

• Graduate TA Scholarship, Yonsei University, 2022

• Summa Cum Laude, Sogang University, 2016

• Honors Scholarships, Sogang University, 2013-2015