Jeehoon Park

Jeehoon ParkJeehoon Park is currently Senior Economist at IMS Consulting Services in McLean, VA, specializing in real estate finance, international finance, and risk management. Prior to joining IMS Consulting Services, Dr. Park worked for the National Assembly of Korea, Center for Strategic and International Studies, and the World Bank (IBRD). Dr. Park received his Master of Science in Finance and Ph.D. in Business from the George Washington University School of Business, and his B.A. in Social Welfare and Economics from Seoul National University, Seoul, Korea. Dr. Park’s research has been presented at major academic conferences, including annual meetings of the Financial Management Association, “Hybrid Interest Rate Choice in the Subprime Mortgage Market”, and American Real Estate and Urban Economics Association, “Do Borrowers Choose the Wrong Subprime Mortgage Products?”.

Papers Published in World Economics:

Korean Housing Finance, Household Debt, and Economic Growth

Governments around the world are confronted with the problem of stoking demand and re-firing growth. The Korean government has relied on making mortgage credit more readily available to boost the housing market and energize the economy. However, this policy exposes Korean households to additional financial risks given their high levels of indebtedness. Moreover, since typical Korean home mortgages feature short-term maturities, floating-rate interest payments, and final balloon payments of principal, such risks are heightened. The Korean mortgage system requires reform, and efforts are needed to reduce the vulnerability of Korean households in coping with possible external shocks, such as sharp interest rate rises and unexpected house price declines. Since housing accounts for almost three quarters of typical Korean household asset portfolios, the housing market, combined with an expected decline in the Korean population, has a significant implication for long-term growth prospects of the Korean economy and the fortunes of the middle class in Korea. The paper assesses public policy options for reform of the mortgage market in Korea with the aim of reducing vulnerabilities for households and for economy more generally. Governments facing similar policy choices as does Korea must balance policies for short-term growth with the longer-run risks involved.

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