韓國의 財政運用과 國債管理

Budget Performance and Debts Management Policy in Korea

The purpose of this paper is to examine the capability of the government to utilize the bond financing both on theoretical and empirical grounds. A theoretical model was built on the tax-smoothing hypothesis to estimate optimum scale of bond financing. The optimum scale of bond financing is determined by the tax rate that minimize the excessive tax burden. An econometric model was specified to estimate the scales. Most of the results of estimation appeared to be consistent with the theoretical model. The optimum scale of bond financing was estimated according to the model. It was implied from the tests that there did exist some capacity for the government to issue bonds to make up budget deficits. The above conclusion can also be supported by the fact that annual average growth rate of the Korean eonomy exceeded the average of real interest rate. One problem with bond financing may consist in non-negligible burdedn of interest payment and resultant rigidity of fiscal structure. It was found that the intertemporal budget constraints were fulfilled and thus no default risks exists in bond financing. However, the funds mobilized by the bond issues would have to be used to some self-liquidating areas; investment in the social overhead capitals and funds for public investement.