Research Staff

Research Staff

Jung, Whayoung SNS Research Fellow Macro-Financial Analysis
Head of the Center, Fixed Income Research Center


Ph.D., Economics, University of Illinois at Urbana-Champaign, 2020
M.A., Economics, University of Illinois at Urbana-Champaign, 2018
B.S., Statistics, B.A., Economics, Seoul National University, 2009
Professional Experience
Research Fellow, Korea Capital Market Institute, 2020.7-
Teaching/Research Assistant, University of Illinois at Urbana-Champaign, 2016-2020
Economist, Bank of Korea, 2009-2015



A Thought on Stability of Household Debt during Monetary Tightening Cycles / Sep. 19, 2023
Amid increasing expectations for house price growth, household debt, especially mortgage loans, has been recently surging. With deregulation measures for the property market, expectations for house price increases seem to have been heightened in anticipation of lower interest rates resulting from slowing inflation.Considering that households are increasingly burdened with principal and interest repayment due to monetary tightening, growing household indebtedness could hinder economic growth and stability, which requires caution. As benchmark rate hikes are reflected in lending rates, a greater burden of principal and interest repayment is being imposed on households and the resultant decline in disposable income serves as a factor behind a consumption slowdown. In the meantime, household financial solvency is likely to deteriorate further, particularly among low- and middle-income households that assume a heavier burden of debt service payment relative to their income.Interest rates will possibly stay higher for longer owing to upward pressure on market interest rates arising from anxieties over domestic inflation and external factors. In this respect, it should be noted that the household burden of principal and interest repayment is likely to keep mounting for a considerable period. First of all, it is inevitable to gradually raise public utility rates and thus, uncertainties over inflation may increase going forward. On top of that, upward pressure on market interest rates arising from external factors could add to the household burden of principal and interest repayment.In the face of the monetary tightening cycle, policy authorities of Korea have been taking proactive measures to ensure a soft landing for the property market. Amid a slowdown in household spending growth, ballooning household debt could weigh down on the macro economy in terms of growth and stability. Notably, there may be a trade-off between policy goals of a soft landing for the housing market and stable management of household debt. Accordingly, the government needs to reconcile its policy goals through sophisticated policy implementation. Meanwhile, authorities should provide objective prospects for future economic conditions to preclude economic entities from having overly optimistic expectations. Furthermore, households should manage the risk of real estate investment to a tolerable extent.
Assessment of Recent Corporate Financing Conditions in Korea / Apr. 04, 2023
Although monetary tightening has continued, corporate financing is on a sharp rise. The growth of corporate financing stems from increased demand for funds for production and investment activities, driven by a surge in prices of raw materials and producer goods. Another factor behind such growth is that export prices have declined more quickly than import prices, thereby aggravating corporate profitability.In 2023, corporate financing conditions have improved as a whole on a YoY basis but there remains risk factors. Above all, it is worth noting the divergence in issuance conditions by credit rating in the corporate bond market. Companies with lower credit ratings tend to show high reliance on policy support. In terms of bank loans, if banks adopt tougher rules for credit risk management amid prospects for slowing growth, they are highly likely to reduce funding for individual business owners and SMEs that lack creditworthiness or collateral for loans. In the meantime, funding for state-owned energy enterprises has continued climbing on the back of their high credit ratings. But if greater volatility in the financial market dampens investor sentiment, such a trend could exacerbate the financing conditions of low-rated firms.Considering that demand for corporate financing has recently been growing, an abrupt increase in market volatility may trigger financial instability, especially in the corporate sector. Hence, the authorities and Bank of Korea should work on preventing market volatility from further escalating. They also need to pre-emptively identify and protect against vulnerable factors. Private sector agents including companies should step up risk management with a focus on liquidity risk.
Changes in Household Assets and Debts: Characteristics and Implications / Jul. 26, 2022
In a microdata-based analysis of changes in household assets, the wealth gap between Korea’s households has grown since 2017, primarily driven by real estate assets. Since households with a greater net worth tend to have a larger share of real estate holdings, property price growth contributes to a widening wealth gap. In terms of indebtedness, households with their heads aged under 50 have seen their financial liabilities ballooning due to the increase in housing loans. It is notable that the purpose of loans taken out by household heads under the age of 50 has varied by the size of household net worth. To be specific, the share of loans for leasehold (jeonse) or security deposits has been increasing among households in the bottom 60% net worth segment, while households in the top 40% have a larger share of loans for residential housing purchases.In Korea, the financial structure of households is susceptible to real estate price fluctuations as they have a relatively larger share of property assets. In this regard, the government should strive to prevent property prices from soaring sharply by managing housing supply and demand and financial conditions. It is also noteworthy that those aged under 50 have recently seen their financial liabilities rising substantially on the back of real estate price increases over the past several years. What is needed at this juncture is thorough preparation to keep financially unstable households from acting as weak points in the economy.
Risk Factors in Korea’s Bond Market amid Tightening Financial Conditions / May. 03, 2022
The yields on KTBs are rising steeply as upward pressure on interest rates-the Fed’s earlier-than-expected tightening of monetary policy and rising domestic inflation-mounts. In the KTB market, a plunge in KTB prices and rising volatility have recently dampened investor sentiment. Furthermore, an imbalance between supply and demand resulting from the increase in KTB issuance and weaker demand from major investors have reduced liquidity in the KTB market. In the meantime, a sharp increase in interest rates seems to have a relatively bigger impact on Korea’s corporate bond market, thereby deteriorating liquidity. In the course of monetary policy normalization, a proper cushion needs to be arranged to prevent a steep decline in liquidity of the bond market. Notably, decreasing liquidity in the KTB market could result in a liquidity crunch across the financial market and a surge in financing costs. Accordingly, Bank of Korea should seek to maintain stability in the financial market by purchasing KTBs if liquidity conditions become tighter. The Korean government needs to take a prudent approach to the increase in KTB issuance, considering growing concerns about the supply and demand imbalance of KTBs. Last but not least, the financial authorities should monitor firms with lower financial soundness to prevent deteriorating liquidity in the corporate bond market from escalating into credit risk.

Other Activities

- Estimation and Inference of Quantile Impulse Response Functions by Local Projections: with Applications to VaR Dynamics (with Heejoon Han and Ji Hyung Lee), Journal of Financial Econometrics (forthcoming). doi.org/10.1093/jjfinec/nbac026
- Quantile Impulse Response Analysis with Applications in Macroeconomics and Finance (with Ji Hyung Lee), In Essays in Honor of Joon Y. Park: Econometric Methodology in Empirical Applications (Vol. 45, pp. 99-131). https://doi.org/10.1108/S0731-90532023000045B004