This study examines the role of aggregate and disaggregate shocks in a small open economy, Korea. Variation in the growth rates of industrial output is decomposed into portions attributable to aggregate, industry group, and sector-specific shocks. Although all types of shocks play a role, sectoral shocks are the dominant source of sectoral output fluctuations. While aggregate shocks are a significant source of sectoral and aggregate output fluctuations, they are no more important than in large industrialized economies that have been studied previously. Consequently, small open economies may not be any more susceptible to aggregate disturbances than are the G-7 countries.