• Economic Analysis
• /
• v.25 no.2
• /
• pp.1-53
• /
• 2019

This paper examines monetary policy quantitatively in a two-agent and small-scale New-Keynesian economy with debt-constrained households that cannot smooth their consumption intertemporally and frictionlessly since highly indebted households are not allowed to borrow above a certain debt ceiling in incomplete financial markets without additional risk premiums due to information asymmetry between savers and borrowers. We find that, in the event of cost shocks, the asymmetric responses of borrowing households without, and saving households with, dividend incomes lead to different labor supplies and consumptions over heterogeneous households, and eventually to an extension of the monetary policy transmission channels. The income effect and low elasticity of the labor supply play key roles in such asymmetric responses over heterogeneous households. We also find that the social welfare in a flexible inflation targeting (FIT) monetary policy, in which both the inflation gap and the output gap are considered in an integrated manner when policy-making, is similar to that of the Ramsey optimal monetary policy (ROP), in which the shares of debt-constrained households, as well as all economic states, including both the inflation gap and output gap, are considered comprehensively for policy-making, and that it is greater than that of simple inflation targeting (SIT) monetary policy, in which only the inflation gap is considered mechanically for policy-making. Such social welfare implies that a FIT policy may still work even in an economy with a sizable number of debt-constrained households. Further, the responses of cost shocks to consumption and labor supply are dying out more slowly under FIT and ROP policies than under an SIT policy.

• The Journal of Fisheries Business Administration
• /
• v.34 no.1
• /
• pp.31-44
• /
• 2003

The purpose of this study is to investigate empirically interaction among the financing decision, investment decision, and profitability by using 41 fisheries corporations in Korea, and to suggest implications of the empirical results for government's financial policy for fisheries corporations. Sample period is 19 years from 1982 till 2000. This analysis method employs the two stage least squares(2SLS) estimation method. From the results of regression analysis by 2SLS estimation method, the adjusted $R^2$ values were high and the overall F values indicated significant. The empirical results of this study are as follows; (1) determinant factors of capital structure model for fisheries are profitability, firm-size, fisheries investment of total asset, and business risk. As pecking order theory explains, the higher is profitability the lower is debt ratio. The larger firm-size, the higher is debt ratio. The higher is fisheries investment of total asset and business risk, the higher is debt ratio. (2) determinant factors of investment model for fisheries are the change of sales, business risk, and debt ratio. These factors have positive relation to fisheries investment of total asset (3) determinant factors of profitability model for fisheries are fisheries investment of total asset and debt ratio. These factors have negative relation to profitability. On the basis of analysis results, on the government's financial policy for fisheries corporations, I suggests that with interest rate reduction, the government should lend more funds to solve the crisis in the financial structure of the fisheries firms

• International Journal of Human Ecology
• /
• v.9 no.1
• /
• pp.81-95
• /
• 2008

This paper examined the impact of psychological characteristics of consumers on household debt decisions. With the use of the Heckit models (the traditional approach to the selection problem) this study undertook an empirical study of the influence of a wide range of factors on financial decisions. This study used U.S. household-level data that offers detailed information on household debt, expectations about future income, expectations about future economic conditions, the amount of financial risk the respondent was willing to take, and the amount of time allotted for planning family savings and spending. This study showed that respondents with both substantial financial risk tolerance and positive expectations about future income were likely to have larger household debt showing that researchers and policy-makers need to consider consumer sentiment and preference measures in modeling behavior in credit markets. Additional results showed that household debt is significantly related to two key economic variables: income and net worth.

• Journal of Digital Convergence
• /
• v.11 no.4
• /
• pp.177-188
• /
• 2013

This study examines how managerial ownership structure affects the borrower's choice of private versus public debt using 2,608 firm-year data for 2006-2008. This paper investigates the relationship between managerial ownership structure and debt choice. Managerial ownership is measured using number of stocks and unexercised stock-options and debt is classified public and private debt. The results find that there is a positive association between managerial ownership and the private debt dependence and also find that when firms finance additional funds, higher managerial ownership leads managers to choose private debt not public debt. Since private debt can be classified into bank debt and non bank debt, this paper examines the relationship between managerial ownership and a choice of bank debt. The results indicate that managers with higher ownership are more likely to use bank debt over public debt and non bank debt. By examining the relation between managerial ownership and a debt choice, this paper has following contributions. First, this study shows that managerial ownership affects the choice of the source of financing using three different proxies of managerial ownership. Second, this study classified private debt into bank debt and non-bank debt and provide the evidence of preference toward private debt especially bank debt among other financing sources. Finally, there are extensive studies related to capital structure and managerial ownership, but there is little empirical research on the debt choice and managerial ownership. Thus, this paper adds to literature by exploring the effects of managerial ownership on a debt choice.

• Journal of Digital Convergence
• /
• v.14 no.5
• /
• pp.177-183
• /
• 2016

The purpose of this study is to analyze the affecting factors and debt characteristics with household debt. The method of analysis was used SPSS 22.0. The main results were as follows. First, psychological debt burden group were found to be lower academic background, more household members, job in agriculture, forestry and fisheries and women among demographic characteristics. This suggests the need for the governments who are interested in the risk from household debt. Second, psychological debt burden group showed higher level of debt and average monthly debt repayments. This study implies that it is necessary to do financial education and consulting. Third, psychological debt burden group seemed that the households with more the average monthly interest payments and repayments on income, the more total liabilities compared to total assets. As the ages get higher, it was gradually increased. It suggests that the development of psychological counseling program for debtor with household debt. Other factors(property prices or the financial environments) will be dealt with in the subsequent studies.

• The Journal of Industrial Distribution & Business
• /
• v.12 no.2
• /
• pp.41-52
• /
• 2021

Purpose: This study aims to provide implications for the government's housing supply policy by analyzing the factors that determine the type of real estate holding and household debt. This study started from the awareness that the determinants of household debt differ depending on the type of real estate holding. Research design, data and methodology: Real estate ownership type was classified and analyzed into 4 models: model 1 (1 household 1 house and self-resident), model 2 (1 household multiple real estate ownership and self-resident), model 3 (1 household 1 house and rent residence), model 4 (1 household holds a large number of real estate and rent residence). The analysis method used multiple regression analysis. The dependent variable was household total debt. As independent variables, household debt, annual gross household income, financial assets, real estate net assets, annual repayment, demographic & residential characteristics were used. Results: 1) Model 4 has the highest household debt and the highest gross income, Model 2 has the most real estate mortgage loans and real estate net asset, and Model 1 has the highest real estate mortgage payments. 2) The positive factor of common household debt determinants is real estate net assets, and the negative factor is financial assets. 3) It was the net assets of real estate that acted as a positive factor in common for the four models. In other words, the more financial assets, the less household debt. It was analyzed that the more net assets of real estate, the more household debt. The annual repayment of financial liabilities had no influence on household debt, while the annual repayment of loan liabilities and household debt had a positive relationship. Conclusions: 1) It is necessary to introduce benefits and systems that can increase the proportion of household financial asset. Specific alternatives include tax benefits and reduced fees for financial asset investment. 2) In the case where a homeless person prepares one house for one household, it is necessary to prepare various support measures according to the income level. The specific alternative is to give additional points for pre-sale or apply an interest rate cut incentive for mortgage loans.

• Asian Journal of Business Environment
• /
• v.7 no.4
• /
• pp.5-9
• /
• 2017

Purpose - Many countries rely on currency depreciation or debt-financed government spending to stimulate their economies. Currency depreciation tends to increase net exports and aggregate demand but reduce short-run aggregate supply due to higher import costs. Debt-financed government spending increases aggregate demand, but the crowding-out effect due to a higher real interest rate may reduce private spending and aggregate demand. Therefore, the net impact of currency depreciation or debt-financed government spending on equilibrium real GDP is unclear. Research design, data, and methodology - This paper examines potential impacts of real depreciation of the ringgit, more government debt as a percent of GDP and other relevant macroeconomic variables on aggregate output in Malaysia. Results - Applying the AD/AS model, this paper finds that aggregate output in Malaysia is positively associated with real appreciation during 2005.Q3-2010.Q3, real depreciation during 2010.Q4-2016.Q1, the debt-to-GDP ratio and the real stock price, negatively affected by the real lending rate and inflation expectations, and is not influenced by the real oil price. Conclusions - Real depreciation of the ringgit after 2010. Q3 or sustainable expansionary fiscal policy would be beneficial to the economy.

• The Journal of Asian Finance, Economics and Business
• /
• v.9 no.9
• /
• pp.283-289
• /
• 2022

Public investment is the process of investing capital in projects that serve national interests and thereby create a driving force for economic development in each country. Especially in developing countries, investment capital is limited, so improving the efficiency of public investment becomes a decisive factor for economic development and enhancing the country's status and ultimately making the country a should be rich. Vietnam has a low starting point, has gone through the doi moi process, and has gradually become a middle-income country, and public investment is attracting attention to improve the quality of the country's infrastructure. The objective of this study is to evaluate the factors affecting the effectiveness of public debt management in Vietnam, through a survey of 150 experts with knowledge of public investment and public debt management, using the results of the estimation through the Using SPSS software, the research results show that the monitoring system and human resource quality have an impact on the effectiveness of public debt management. The study could not, however, discover any proof of the influence of institutional quality, geographic location, or accountability on the effectiveness of public debt management. The research also addresses several policy recommendations for Vietnam that would help the country manage its public debt better in the future.

• Journal of Korean Society for Quality Management
• /
• v.50 no.1
• /
• pp.139-151
• /
• 2022

Purpose: This study aims to delve into the empirical implications in management efficiency by analyzing the relation between management efficiency and debt ratio in public institutions. Methods: Based on 165 public institutions published in public business information system from 2016 to 2020, Data Envelopment Analysis(DEA) for estimating management efficiency was performed. This study analyzed the relationship between management efficiency and debt ratio using multi-regression analysis. It also examines how the relationship varies depending on the type of public institution. Results: The results of this study are as follows; We find that there is no significant relation between management efficiency and debt ratio. However, we find that this relationship can be different depending on the type of public institution. Management efficiency is negatively associated with debt ratio for quasi-market type public institutions. This negative relation tends to mitigate for market type public institutions, which suggests that management efficiency may convey differential implications depending on the type of business environment represented by the type of institution. Conclusion: The overall results suggest that the government needs to due caution in establishing a policy plan to reduce debt by increasing management efficiency, taking the specific business environment, particularly with regard the type of institution.

• East Asian Economic Review
• /
• v.24 no.4
• /
• pp.417-440
• /
• 2020

The coronavirus pandemic of 2019-20 confronted fiscally dominant regimes around the world with the question of whether the large deficits caused by the health crisis should be monetized or financed by issuing debt. The unpleasant monetarist arithmetic of Sargent and Wallace (1981) states that in a fiscally dominant regime tighter money now can cause higher inflation in the future. In spite of the qualifier 'unpleasant,' this result is positive in nature, and, therefore, void of normative content. I analyze conditions under which it is optimal in a welfare sense for the central bank to delay inflation by issuing debt to finance part of the fiscal deficit. The analysis is conducted in the context of a model in which the aforementioned monetarist arithmetic holds, in the sense that if the government finds it optimal to delay inflation, it does so knowing that it would result in higher inflation in the future. The central result of the paper is that delaying inflation is optimal when the fiscal deficit is expected to decline over time.