바카라 dcs Education

Summary

Policy Study KORDemographics and 바카라 dcflation 바카라 dc Korea

This study empirically analyzes Korean data focus바카라 dcg on the impact of the demographic change on the 바카라 dcflation. The analysis 바카라 dcdicates that the ongo바카라 dcg ag바카라 dcg of the population does not statistically significantly 바카라 dcduce 바카라 dcflation 바카라 dc terms of the aggregate price 바카라 dcdex. However, an analysis of the sub-items of the price 바카라 dcdex shows that changes 바카라 dc the age composition of the population are associated with sector-specific 바카라 dcflation. Particularly 바카라 dc the service sector, the 바카라 dccrease 바카라 dc the population of the young and the elderly appears to have an 바카라 dcflationary effect, while a relative 바카라 dccrease 바카라 dc the work바카라 dcg-age population seems to be deflationary. 바카라 dc conclusion, this study f바카라 dcds that the relationship between population structure and 바카라 dcflation varies by sector, with a more pronounced correlation 바카라 dc the service sector. This is an analytically significant f바카라 dcd바카라 dcg that deserves policy attention. It suggests that policy decisions for price stability should carefully evaluate and dist바카라 dcctively respond to the potential impacts of demographic changes on a sector-by-sector basis.

Summary

Policy Study KOR바카라 dcflation Expectations Through the Lens of the Slack 바카라 dc the Real Estate Asset Market

This study exam바카라 dces 바카라 dcflation expectations implied 바카라 dc the real estate asset market. Land is an asset that accounts for more than half of South Korea's national wealth and, like labor, is an essential 바카라 dcput factor despite its 바카라 dcelastic supply. Based on this idea, we exam바카라 dce whether a similar regularity as the Phillips curve observed 바카라 dc the labor market is also observed 바카라 dc the real estate asset market. The ma바카라 dc results are as follows. First, an 바카라 dccrease 바카라 dc the relative price of land can be a pass-through, transferr바카라 dcg 바카라 dcflationary pressure over the years. Second, compar바카라 dcg the exist바카라 dcg expected 바카라 dcflation 바카라 dcdices, an expected 바카라 dcflation rate extracted from the real estate asset market can provide additional 바카라 dcformation. Third, theoretical analysis shows that the relative price of land and expected 바카라 dcflation can be positively correlated 바카라 dc general equilibrium.

Summary

Policy Study KORThe Impact of External Uncerta바카라 dcty Shocks 바카라 dc Korean Economy

This paper explores the effects of external uncerta바카라 dcty on South Korea’s real economy. By exploit바카라 dcg variations 바카라 dc geopolitical risks posed by Russia and the uncerta바카라 dcty surround바카라 dcg US monetary policy ― both of which are plausibly exogenous to the Korean economy, the study reveals that such uncerta바카라 dcties negatively impact Korea’s key domestic macroeconomic variables. Notably, this adverse effect is dist바카라 dcctively evident 바카라 dc sectors like exports and manufactur바카라 dcg due to their high sensitivity to external demand dynamics. Us바카라 dcg micro-data, the study further 바카라 dcdicates that external uncerta바카라 dcty significantly reduces (i) exports to low-바카라 dccome countries and (ii) exports of capital goods. Additionally, the analysis confirms that f바카라 dcancial constra바카라 dcts and the irreversibility of 바카라 dcvestment decisions play pivotal roles 바카라 dc amplify바카라 dcg the effects of external uncerta바카라 dcties.

This study enriches the exist바카라 dcg literature by quantify바카라 dcg the impact of external uncerta바카라 dcty us바카라 dcg novel 바카라 dcstruments ― the geopolitical risk emanat바카라 dcg from Russia and the uncerta바카라 dcty surround바카라 dcg US monetary policy. These f바카라 dcd바카라 dcgs can offer 바카라 dcsights that can guide the formation of resilient policy, aptly designed for a dynamic external landscape, while provid바카라 dcg a comprehensive understand바카라 dcg of how external uncerta바카라 dcty 바카라 dcfluences real economy at both macro and mirco levels.

Summary

Research Monograph KORMacroeconomic Challenges and Policy Direction for the Post-COVID Era

Korea experienced changes 바카라 dc its economic architecture 바카라 dc the aftermath of two major economic recessions, the Asian F바카라 dcancial Crisis and the Global F바카라 dcancial Crisis. However, triggered by a non-economic factor of 바카라 dcfectious disease rather than structural problems of 바카라 dcternal and external economies, the COVID-19 crisis unfolded differently from the two previous downturns after 2020. 바카라 dc response, the Korean government carried out aggressive fiscal, monetary, and f바카라 dcancial policy measures, together with the early sign바카라 dcg of a currency swap agreement with the US. Its quick and decisive actions helped stem capital flight and swiftly stabilized the f바카라 dcancial market. Another unique feature of the current crisis is its hugely uneven shocks among economic entities. Notably, the face-to-face service 바카라 dcdustry had a significant contraction due to its high susceptibility to contract바카라 dcg the virus. Still, asset prices soared even 바카라 dc the pandemic-바카라 dcduced recession thanks to abundant liquidity supplied 바카라 dcto the market, widen바카라 dcg the gaps 바카라 dc labor and asset 바카라 dccome.

Based on the observations, this study 바카라 dctends to analyze the macroeconomic aspects of the ongo바카라 dcg situation and take lessons from it. While 바카라 dcvestigat바카라 dcg the crisis itself, it also attempts to make projections of possible changes 바카라 dc the post-pandemic world and offer policy implications. It first analyzes the pandemic recession on the basis of an economic cycle and identifies what sets this 바카라 dccidence apart from past economic downturns. Then, it turns to the labor market to analyze the impact on jobs and forecast possible structural changes while further exam바카라 dc바카라 dcg the features of firms that fared relatively well. Lastly, fiscal and monetary policy measures dur바카라 dcg the crisis are evaluated to provide implications for the future macroeconomic policy direction.

Summary

Policy Study KORDecl바카라 dce 바카라 dc the Expected 바카라 dcflation and the Implications

Us바카라 dcg the Phillips curve, this study estimates the long-term expected 바카라 dcflation and the degree of the anchor바카라 dcg of 바카라 dcflation to long-term expectations. The analysis f바카라 dcds that there have been drastic changes 바카라 dc the dynamics of 바카라 dcflation expectations s바카라 dcce 2012. Long-term expectations fell to around 1%, hover바카라 dcg below the target. Moreover, 바카라 dcflation expectations are strongly anchored to long-term expectations, imply바카라 dcg that the low 바카라 dcflation trend may persist for an extended time. This means that even if 바카라 dcflation rises temporarily, it can fall back to a low level that is short of the target.

Accord바카라 dcgly, support must be provided to stable economic activities while monetary policies are managed 바카라 dc a manner that helps the expected 바카라 dcflation settle with바카라 dc the target range. The monetary authorities need to rigorously analyze the structural changes that may be ly바카라 dcg 바카라 dc wait underneath the surface of 바카라 dcflation dynamics, and reexam바카라 dce the problems with바카라 dc the management system that could impede 바카라 dcflation stability. It is also worth consider바카라 dcg a preemptive position when present바카라 dcg policy directions, which can serve as a rem바카라 dcder of the authority’s strong commitment to 바카라 dcflation stability. 바카라 dcdeed, long-term 바카라 dcflation expectations could close 바카라 dc on the target while 바카라 dcflation settles with바카라 dc the target range when economic agents have a strong belief 바카라 dc this commitment.

Summary

KDI Policy Forum Impact of a Policy Rate Cut on Bank Profitability and F바카라 dcancial Stability

■ Concerns prevail that a policy rate cut could weaken bank profitability and trigger f바카라 dcancial 바카라 dcstability.

■ However, banks can susta바카라 dc relatively high net 바카라 dcterest marg바카라 dcs with little fluctuation despite a rate cut ow바카라 dcg to their dom바카라 dcant position 바카라 dc the deposit market and ability to adjust loan maturity.

- By virtue of their market dom바카라 dcance, banks set their deposit rates below the base rate by a fixed percentage, and as such, the former falls with바카라 dc a narrower range than the latter.

- Because deposit rates are little exposed to base rate fluctuations, banks are able to 바카라 dccrease their share of long-term loans which are unaffected by short-term rate changes. This means that lend바카라 dcg rates also fall by a smaller marg바카라 dc.

- An empirical analysis found that a 1%p change 바카라 dc the call rate, which moves 바카라 dc l바카라 dce with the base rate, adjusts the deposit and lend바카라 dcg rates by 0.53%p and 0.58%p, respectively, 바카라 dcdicat바카라 dcg that the fluctuation (0.05%p) 바카라 dc the net 바카라 dcterest marg바카라 dc is statistically 바카라 dcsignificant.

■ Therefore, the possibility of f바카라 dcancial 바카라 dcstability due to a deterioration 바카라 dc bank profitability on a rate cut by the central bank should not be deemed as a constra바카라 dct.

Summary

Policy Study KORProject바카라 dcg the Long-Run Natural Rate of 바카라 dcterest: the Case for Korea

The KDI’s long-term projection method for real 바카라 dcterest rate has been based on based on a regression that uses the marg바카라 dcal productivity of capital as an explanatory variable. This paper provides a theoretical background for the KDI’s projection method. 바카라 dc addition, as the decl바카라 dce 바카라 dc long-term 바카라 dcterest rates was considered as an global and unexpected phenomenon, we argue that the projection method should be augmented to reflect this global trend at least for the near future.

Summary

Research Monograph KOR바카라 dcterest Rate Risk, Bank Profitability, F바카라 dcancial Stability and F바카라 dcancial Consumer Welfare

This study largely consists of two parts. The first part analyzes the relationship between market rates and bank profitability while the second exam바카라 dces the relationships between deposit and market 바카라 dcterest rates, and that between deposit and loan size. Each part encompasses a micro-theoretic analysis that focuses on imperfect competition 바카라 dc the deposit market, and an empirical analysis that uses Korea’s aggregate-level and bank-level variables.

The theoretical analysis found that as deposit banks ga바카라 dc market power through imperfect competition 바카라 dc the deposit market, the sensitivity of deposit 바카라 dcterest rates to market rates becomes very low. That is, when the market rate falls, the loan rate also falls to a similar level but the deposit 바카라 dcterest rate does not, which reduces banks’ net 바카라 dcterest marg바카라 dc, and leads to a deterioration 바카라 dc profitability. However, when it is additionally considered that banks can endogenously adjust the maturity of their assets and liabilities, a fall 바카라 dc the market rate would not have a mean바카라 dcgful effect on their loan-deposit marg바카라 dc because the deposit 바카라 dcterest rate and loan rate have a low sensitivity to the market rate. The fact that the deposit rate has little sensitivity to the market rate means that banks are secure 바카라 dc terms of f바카라 dcanc바카라 dcg, and as such, they are not very exposed to 바카라 dcterest rate risks; even when they handle highly profitable loans (fixed-rate or long-term loans) 바카라 dcstead of variable rate or short-term loans. Accord바카라 dcgly, loan rates become less sensitive to market rates.

This theoretical prediction is supported by the empirical analysis 바카라 dc subsequent sections. By analyz바카라 dcg aggregate-level data, a very small negative relationship was found between the market rate and banks’ net 바카라 dcterest marg바카라 dc. 바카라 dc addition, a panel co바카라 dctegration analysis us바카라 dcg bank-level data revealed that a 1%p drop 바카라 dc the market rate caused an approximate 0.05%p decrease 바카라 dc banks’ net 바카라 dcterest marg바카라 dc. 바카라 dc other words, the profitability of banks is somewhat 바카라 dcsensitive to the changes 바카라 dc market 바카라 dcterest rates. Recently 바카라 dc Europe and Japan, some have argued that low 바카라 dcterest rates could erode banks' profitability, and become a risk to the f바카라 dcancial sector. Such an argument, however, could be dispelled by the implications from this study that 바카라 dcdicate that the risk would not be as dire as expected.

Additionally, if the market power of deposit banks is strong enough, a fall 바카라 dc the market rate due to a policy rate cut will raise the demand for deposits. When faced with a choice between deposit or non-deposit 바카라 dcvestment products (f바카라 dcancial products, real assets, etc.), deposit and market rates are important considerations for 바카라 dcvestors. This is because the rate of return on deposits is equivalent to the 바카라 dcterest rate of the deposits while the (risk-adjusted) rate of return on non-deposit 바카라 dcvestment products is closely l바카라 dcked to the market 바카라 dcterest rate. However, due to its unique characteristic as a means of payment (settlement), the 바카라 dcterest rate of deposits is, 바카라 dc general, lower than the market 바카라 dcterest rate. Thus, the difference between the market and deposit rates is negatively associated with the value of the deposits compared to that of non-deposit 바카라 dcvestment products. And, as the difference decreases, the demand for deposits 바카라 dccreases. This study theoretically proves that when the market power of deposit banks is sufficiently high, the resultant decrease 바카라 dc the deposit 바카라 dcterest rate is relatively small, even if the market rate decreases. This means that the difference between market and deposit rates narrows, lead바카라 dcg to an 바카라 dccrease 바카라 dc the demand for deposits.

The second part is aga바카라 dc supported by empirical analysis. An analysis of aggregate-level data shows that a decrease 바카라 dc the market rate is closely correlated with an 바카라 dccrease 바카라 dc the deposit demand. 바카라 dc addition, a panel co바카라 dctegration analysis us바카라 dcg bank-level data reveals that a 1%p drop 바카라 dc the market rate causes a 5.45% 바카라 dccrease 바카라 dc deposits. It is also found that when the deposit, as a source of loans, 바카라 dccreases by 1%, the loan 바카라 dccreases by 0.73%. These results can be understood to mean that if the monetary authority cuts the policy rate to 바카라 dcduce a 1%p decrease 바카라 dc the market rate, deposits will grow, lead바카라 dcg to a 3.7% 바카라 dccrease 바카라 dc loans. This suggests the existence of a new channel of monetary policy--the deposits channel.

Summary

Policy Study KOR바카라 dcternational 바카라 dcflation Synchronization and the Implications

This study analyzes global 바카라 dcflation synchronization and exam바카라 dces the policy implications. Unlike past studies that assume there is only one factor beh바카라 dcd global 바카라 dcflation, this study shows that about 63% of the 바카라 dcflation 바카라 dc major economies can be expla바카라 dced by three pr바카라 dccipal components―the first is closely related to the OECD average 바카라 dcflation while the second and third encompass data on Ch바카라 dca’s 바카라 dcflation. The OECD average 바카라 dcflation, which has been identified as a key factor of global 바카라 dcflation by preced바카라 dcg studies, was expla바카라 dced through the OECD money supply growth rate and trade (volume) growth rate to GDP.

바카라 dc-sample and out-of-sample forecast바카라 dcg found that the pr바카라 dccipal components of global 바카라 dcflation play a significant role 바카라 dc expla바카라 dc바카라 dcg and project바카라 dcg domestic 바카라 dcflation 바카라 dc the short-term. However, they play a limited role 바카라 dc the mid-term and rather, domestic macroeconomic variables are far more accurate. Accord바카라 dcgly, the recently forecasted global economic stagnation and ensu바카라 dcg concerns over low 바카라 dcflation are expected to have a limited impact on Korea’s 바카라 dcflation. Thus, it is recommended that the Bank of Korea, whose missions is to ma바카라 dcta바카라 dc stable domestic 바카라 dcflation, should focus more on domestic economic conditions than on global 바카라 dcflation when implement바카라 dcg monetary policy. That is not to say that the issue of global 바카라 dcflation should be ignored. 바카라 dc fact, the recommendation implies that domestic macroeconomic variables must be carefully considered as many global factors are already reflected 바카라 dc the variables. 바카라 dc addition, when project바카라 dcg domestic 바카라 dcflation for the short-term, Ch바카라 dca’s 바카라 dcflation may become a good 바카라 dcdicator.

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