Korean economy has experienced enormous changes in economic environment in the first half of 90's.  All these institutional reform and changes in behavioral patterns of each economic agents along with rapid increase in economic openness and per capita income as well as financial liberalization could not be dealt efficiently with the current model only by reestimating coefficients of behavioral equations, though the current KERI Quarterly Macroeconometric Model of Korean Economy had been proved as an operational and useful econometric tool while using the model mainly for KERI's quarterly macroeconomic forecast since 1990.  We have, therefore, revised the current model by taking followings into considerations;        

1. With the main trend of liberalization of financial sector including interest rates and foreign exchage rates, money supply and interest rate are dealt as endogeneous variables. Yields of corporate bond has been chosen as a main indicator for the market interest rates. Won/Yen rate as well as Won/U.S.$ has been used as explanatory variables in the estimation.

2. We excluded data for the period from 1970 to 1984 in the equation estimation. There were 2 times of oil shocks in 1970's, a negative growth and changes in exchange rate system in early 1980's.

3. We subdivided fixed investment into construction and equipment investment, private consumption into durable good, semi-durable, non-durable and service consumption to enhance the accuracy of the model.