Purpose

This study aims to re-examine the money stock determination process for South Korea under the assumption of the existence of potential asymmetric (non-linear) relations (a mechanism) between the money stock and the monetary base. Because, the true and detailed diagnosis of this mechanism is crucially important for the Bank of Korea’s (BOK)’ monetary policy, as this country has been adopting an inflation targeting policy (ITP) for a long-time.

Design/methodology/approach

This paper applies the non-linear autoregressive distributed lag model by Shin et al. (2014). This model separates the original series of the monetary base into their increases (+) and decreases (−). The increases (+) and decreases (−) done by the BOK correspond to expansionary and contractionary monetary policies, respectively, in this study.

Findings

The empirical findings are two-fold. First, the money stock determination process in Korea has a non-linear (asymmetric) structure. This means that increases (+) and decreases (−) in the monetary base have asymmetric (different) impacts on money stock. Second, the BOK’s only expansionary monetary policy exhibits exogenous nature money stock determination with an almost stable money multiplier. These findings may help the BOK to take preventive precautions in its monetary policy implementations.

Originality/value

This study with its methodology may help the BOK to take preventive measures in its ongoing ITP proactively.

中文翻译：

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货币存量确定过程和货币乘数：韩国案例

目的

本研究旨在在货币存量与基础货币之间存在潜在的不对称（非线性）关系（一种机制）的假设下，重新审视韩国的货币存量确定过程。因为，该机制的真实和详细诊断对于韩国银行（BOK）的货币政策至关重要，因为该国长期以来一直采用通胀目标政策（ITP）。

设计/方法/方法

本文应用了 Shin等人的非线性自回归分布滞后模型。(2014)。该模型将基础货币的原始序列分为增加 (+) 和减少 (-)。在本研究中，韩国央行所做的增加 (+) 和减少 (-) 分别对应于扩张性和紧缩性货币政策。

发现

实证结果有两个方面。首先，韩国的货币存量确定过程具有非线性（不对称）结构。这意味着基础货币的增加 (+) 和减少 (-) 对货币存量具有不对称（不同）的影响。其次，韩国央行唯一的扩张性货币政策表现出外生性质的货币存量决定，货币乘数几乎稳定。这些发现可能有助于韩国央行在其货币政策实施中采取预防措施。

原创性/价值

这项研究及其方法可能有助于韩国央行在其正在进行的 ITP 中主动采取预防措施。