政府財政赤字에 대한 貨幣的 順應程度 分析

Budget Deficits and Monetary Accommodation in Korea

Over the past several years a number of empirical studies appearing in the literature have attempted to quantify the Federal Reserve’s reaction function. But surprisingly little research effort has been devoted to the study of the estimation of the central bank’s monetary reaction function in Korea. Furthermore, the limited amount of empirical evidence is often ambiguous. The purpose of this study is, firstly to review theoretical issues and empirical findings on the subject, and secondly, to show an empirical evidence in case of Korea. A survey of various empirical studies is contained in chapter Ⅱ. The empirical researchs are presented in chapter Ⅲ with concluding remarks in chapter Ⅳ. The reaction function is estimated using annual data for the Korea over the 1971-95. The coefficient of government budget deficits is significant with value of 0.509. It suggests that 50 percent of budget deficits is accommodated by the Bank of Korea. This paper demonstrates that the origin of the deficit significantly affects the monetary response undertaken by the central bank. The budget deficits are consistently a significant determinant of money growth.