1. Introduction

This study empirically analyzes the effects of global and domestic uncertainties on South Korea's macro economic variables. In general, uncertainties have a negative impact on the economy as a whole.  In the case of South Korea, it is small and open economies. Thus, economic dependency is high, and this paper will figure out how large the impact of uncertainty will be in a quantitative way. When uncertainty occurs, it makes economic player's decision-making changing, such as households, businesses and the government. It shrinks consumption, saving and investment, causing an overall economic downturn.  

2. Literature Review

Much of the research into uncertainty and its effects is aimed at the U.S. economy. \cite{bloom2009impact} analyzed the effects of uncertainty using US corporate data. Economic uncertainty has affected real economic variables, and the data have identified the effect that GDP and employment will suffer a decline and rebound in a short term period of six months and recover in the mid- to long-term if uncertainty increases by 1 percent. Many previous studies estimated the effects of uncertainty with various methodologies. \cite{Jones2013} estimates the correlation between US uncertainty and GDP by using DCC-GARCH model.   \cite{Caggiano2014} estimates the impact of the US uncertainty shock on the dynamic of unemployment by using non-linear VARs. And in \cite{Gabauer2018}, the effect of the EPU were analyzed using TVP-VAR. In this paper, he confirmed that the outbreak of uncertainty of Japanese earthquake had a negative impact on trade with the United States. 
However, a number of recent studies have also been conducted to analyze the impact of uncertainty on individual countries, mainly targeting major countries, including the United States. For example, \cite{Bernal2016} analyzed that the ripple effects of uncertainty using the CoVaR method for Eurozone countries (Germany, France, Italy, Spain), including the United States. As a result, it has confirmed that if uncertainties arise, they spread through the Eurozone bond market to risks in individual countries. \cite{Istiak2018} calculated uncertainty shocks for G7 countries (Canada, Germany, Japan, U.K., France, Italy and the United States). \cite{Choi2017} analyzed the ripple effects of uncertainty on 12 OECD countries, including the United States. In particular, the study found that smaller, open economies are more sensitive to changes in exchange rates depending on the mechanism of the international financial market. These countries have also shown that the negative economic impact of global uncertainties has increased over time.
Although few of these papers studied the subject of uncertainty in the Korean economy,  \cite{Shin2018} directly measured uncertainties in the Korean economy and compared and analyzed them with existing uncertainty indexes. The paper, which studied the ripple effects of uncertainty, was a study by \cite{Cheng2017}. It used VARs to analyze the impact of global uncertainty and domestic uncertainty on the Korean economy. However, there are limitations that do not properly reflect reality by using the existing EPU index as an indicator of uncertainty.

3. Data and Descriptive Statistics

In this study, we use 9 variables in estimating SVARs, which are Global Uncertainty(GU), Korea Uncertainty(KU), Korea KOSPI index(KOSPI), Korea consumer price index(KCPI), Korea unemployment rate(KU), Korea won-dollar exchange rate(KER), Korea total investment(KINV) and Korea exports(KEX), respectively. The total periods of time are from 1993Q1 to 2017Q4.