China’s Slowdown / Barry Eichengreen

This paper evaluates explanations for China’s growth slowdown. The natural tendency for rapidly growing economies to slow down is a major factor, along with problems bequeathed by unbalanced growth, including a declining ICOR, slowing total factor productivity growth, and rising indebtedness. A number of other mechanisms are of lesser importance: demographics, President Xi’s centralization of political power and anti-corruption campaign, and U.S. export controls. Sustaining growth in the longer term will require China to step away from investment, debt and export-fueled growth in favor of a balanced growth model with household consumption playing a larger role. Doing so will require hardening of the budget constraints of regional and local governments and restructuring of the nonperforming debts of property and construction companies.

Assessing the Contributions of Non-bank Financial Institutions (NBFI) and ELS Issuance to Systemic Risk in Korea / Jong Soo Hong

Since the Global Financial Crisis of 2008-2009, the importance of nonbank financial institutions in macroprudential management has increased significantly. Consequently, major countries and international financial institutions have been actively discussing and implementing macroprudential supervision and regulation for non-bank financial institutions (NBFI). In this context, this paper analyzes the systemic risk of both banks and non-bank sectors (securities firms and insurance companies) in South Korea over different time periods. Using the widely recognized ΔCoVaR methodology for measuring systemic risk, the analysis reveals that systemic risk increased substantially across all three sectors (banks, securities firms, and insurance companies) during the Global Financial Crisis, the European Sovereign Debt Crisis, and the COVID-19 pandemic. Although the banking sector exhibited relatively high systemic risk compared to the securities and insurance sectors, the relative differences in systemic risk varied across the different crisis periods. Notably, during the margin call crisis in March of 2020, the gap in systemic risk between the banking and securities sectors decreased significantly compared to that during both the Global Financial Crisis and the European Sovereign Debt Crisis, indicating that securities firms had a more substantial impact on risk in the overall financial system during this period. Furthermore, I analyze the impact of the issuance of equity-linked securities (ELS) by financial institutions on systemic risk, as measured by ΔCoVaR, finding that an increase in the outstanding balance of ELS issuance by financial institutions had an impact on increasing ΔCoVaR during the three crisis periods. These findings underscore the growing importance of non-bank financial institutions in relation to South Korea’s macroprudential management and supervision. To address this evolving landscape, enhanced monitoring and regulatory measures focusing on non-bank systemic risk are essential components of maintaining financial stability in the country.

Effects of Intellectual Property Rights Protection on Services Export Diversification in Developing Countries / Sena Kimm Gnangnon

The effects of the betterment of enforced intellectual property rights (IPRs) provisions on services export diversification are investigated. The analysis used an unbalanced panel dataset of 76 developing countries over the period of 1970-2014. The empirical analysis is based on the feasible generalized least squares estimator. It suggests that the implementation of weaker IPR protection fosters services export diversification in less developed countries (i.e., those whose real per capita incomes are less than US$ 1458.60), including those with a low level of export product upgrading. Conversely, in relatively advanced developing countries (countries whose real per capita income exceeds US$ 3356.80), including those with high levels of export product upgrading, the implementation of stronger IPR laws induces greater services export diversification. Finally, the analysis revealed the existence of a non-linear relationship between IPR protection and services export diversification. The implementation of stronger intellectual property laws spurs services export diversification in countries with high degree of IPR protection, especially when IPR protection exceeds a certain level, recorded here as having a score of 1.197. In contrast, in countries with weaker IPR protection, in particular those with IPR protection levels that score less than 0.915, it is rather the implementation of weaker intellectual property laws that promotes services export diversification.

Optimal Monetary Policy System for Both Macroeconomics and Financial Stability (KOR) / Joonyoung Hur and Hyoung Seok Oh

The Bank of Korea, through a legal amendment in 2011 following the financial crisis, was entrusted with the additional responsibility of financial stability beyond its existing mandate of price stability. Since then, concerns have been raised about the prolonged increase in household debt compared to income conditions, which could constrain consumption and growth and increase the possibility of a crisis in the event of negative economic shocks. The current accumulation of financial imbalances suggests a critical period for the government and central bank to be more vigilant, ensuring it does not impede the stable flow of our financial and economic systems. This study examines the applicability of the Integrated Inflation Targeting (IIT) framework proposed by the Bank for International Settlements (BIS) for macro-financial stability in promoting long-term economic stability. Using VAR models, the study reveals a clear increase in risk appetite following interest rate cuts after the financial crisis, leading to a rise in household debt. Additionally, analyzing the central bank's conduct of monetary policy from 2000 to 2021 through DSGE models indicates that the Bank of Korea has operated with a form of IIT,

China’s Slowdown / Barry Eichengreen
　Ⅰ. Introduction
　Ⅱ. Demography
　Ⅲ. Natural Slowdown
　Ⅳ. Unbalanced Growth
　Ⅴ. Rule of Law
　Ⅵ. U.S. Export Controls
　Ⅶ. Fiscal Policy
　Ⅷ. Debt
　Ⅸ. Crisis Risk
　Ⅹ. Conclusion
　REFERENCES

Assessing the Contributions of Non-bank Financial Institutions (NBFI) and ELS Issuance to Systemic Risk in Korea / Jong Soo Hong
　Ⅰ. Introduction
　Ⅱ. Literature Review
　Ⅲ. NBFI in Korea
　Ⅳ. Data and Methodology
　Ⅴ. Empirical Results
　Ⅵ. Conclusion
　APPENDIX
　REFERENCES

Effects of Intellectual Property Rights Protection on Services Export Diversification in Developing Countries / Sena Kimm Gnangnon
　Ⅰ. Introduction
　Ⅱ. Theoretical considerations
　Ⅲ. Empirical strategy
　Ⅳ. Interpretation of empirical results
　Ⅴ. Further analysis
　Ⅵ. Conclusion
　APPENDIX
　REFERENCES

거시경제와 금융안정을 종합 고려한 최적 통화정책체계 연구 / 허준영·오형석
Optimal Monetary Policy System for Both Macroeconomics and Financial Stability / Joonyoung Hur and Hyoung Seok Oh
　Ⅰ. 서 론
　Ⅱ. VAR 모형 및 추정 결과
　Ⅲ. DSGE 모형 및 추정 결과
　Ⅳ. 요약 및 시사점
　부 록
　참고문헌