중앙은행 적립금의 운용에 관한 공공선택이론적 연구A Public Choice Study on the Use of the Central Bank's Reserved Profits: An Experimental Approach Through 61 Countries' Data
- Other Titles
- A Public Choice Study on the Use of the Central Bank's Reserved Profits: An Experimental Approach Through 61 Countries' Data
- Authors
- 김인배; 김일중; 권윤섭
- Issue Date
- Dec-2004
- Publisher
- 한국개발연구원
- Citation
- KDI Journal of Economic Policy, v.26, no.2, pp.209 - 248
- Journal Title
- KDI Journal of Economic Policy
- Volume
- 26
- Number
- 2
- Start Page
- 209
- End Page
- 248
- URI
- http://scholarworks.bwise.kr/ssu/handle/2018.sw.ssu/20561
- ISSN
- 1738-656X
- Abstract
- Although various publicly reserved funds have recently come to the fore of academic and policy-making attention in Korea, researchers rarely take up the issue of the reserve fund retained from annual profits by the central bank (i.e., the Bank of Korea). Starting with the general public choice premise that bureaucrats seek to maximize their discretionary budget, this paper first provides a theoretical reasoning why central bank's bureaucrats would prefer retaining annual profits to turning them to the Treasury. The major tenet to be emphasized is that retained profits as a reserve fund can give the central bankers discretionary power in their disposition. In particular, we focus on the close relationship between the reserve fund and the discount windows. The latter, as a monetary instrument, has traditionally been demonstrated to cause secrecy, arbitrariness, and other bureaucratic amenities in the previous literature. Subsequently, this paper, based on 61 countries data, empirically verifies that the central bank's reserve fund is at least partially used to additionally increase the discount windows. Since an excessive use of discount windows results in inflationary bias, we conclude the paper with some policy suggestions to have such bureaucratic power of discretion in check. This paper, if in its experimental nature yet, is expected to shed a critical implication for establishing the meaningful independence of the central bank to a host of countries.
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