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Started by Verify-12, November 26, 2017, 06:27:28 PM
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Quote from: Arminius on November 26, 2017, 10:19:40 PMThanks for your efforts compiling these information!
Quote from: Figleaf on November 27, 2017, 11:06:24 PMI haven't been in Korea for a long time, but even a long time ago, I wouldn't see denominations below 50 won.The story of generating loans from seigniorage is not credible, if only because seigniorage is a really tiny percentage of what businesses need. If there were some way to plough back seigniorage as business loans, it wouldn't make any difference.Keeping the money supply low in the closed economy Korea had in the seventies will increase the interest rate, which will depress investments and result in unemployment, ultimately putting a brake on economic growth. It is, however, necessary to fight inflation. Inflation is high when the government budget shows a large deficit. High inflation can also be caused by a sudden price rise of a vital commodity, such as oil - even in a closed economy if it doesn't produce (enough) of that commodity itself.
Quote from: Figleaf on November 30, 2017, 11:05:56 PM"Policy loans" are credits that banks are directed to issue, whether the lender is creditworthy or not.The use of the word seigniorage in the second para does not refer to coins. Seigniorage coming out of coins is physical money that supports the government budget one way or the other (through the mint, central bank or the ministry of finance or a combination). It is a part of government income.
Quote from: Verify-12 on November 27, 2017, 12:49:46 AM Basically, only the 500-Won, 100-Won and, barely, the 50-Won produce a profit today. The 10 Won hadn't produced seigniorage since 1974, and all the smaller denominations had almost never done so. Seigniorage for S. Korean banknotes, of course, is much higher.
Quote from: Pabitra on December 01, 2017, 08:46:42 AMThe word Seigniorage is primarily used for coins.The definition is given as enclosed.The source, Annual Report of Royal Australian Mint, 2015-16.The cost of retiring coins must be included.When, due to high inflation, the lower denomination coins become useless, the cost of retiring them becomes substantial as compared to their face value. Case of Nigeria in 2006 is well known example.As far as notes are concerned, a high percentage of the issued volume is presented back for redemption and keeping account becomes a substantial cost. Recent example of India is well known.Thus, for all practical purposes, there is no seigniorage gain in currency notes as they are not assets of the government but a liability of the Central Bank ( unlike coins and some lower value notes).
Quote from: Verify-12 on December 02, 2017, 12:12:35 AMThe Bank of Korea in the 1950s~1990s (this era is my research focus) had a problem: It was NOT independent, but sort of a subsidiary organization of the Korean Ministry of Finance's Monetary Policy Board. The S. Korean government considered the BOK just another government bureau that simply IMPLEMENTED government policies, especially in regard to loans aimed at exports and growth, not a central bank that FORMULATED policy. There was a joke among BOK staff in the 1980s in which they called the Bank of Korea building in downtown Seoul "the Myeongdong Branch of the Ministry of Finance" (Myeongdong was the neighborhood where the building stands).
Quote from: Figleaf on December 02, 2017, 06:13:55 PMFirst, seigniorage. Its use in the text you posted is improper. The proper word is subsidy.
Quote from: Figleaf on December 02, 2017, 06:13:55 PMKerb capital has a very nasty side-effect: it cannot take repayment risk. A participant who could not (completely) re-pay was expected to commit suicide and leave all belongings to the pot. In cases with serious consequences for the participants, the organiser (mostly kisaeng) would be expected to commit suicide also. Those unwilling to commit suicide would be helped along by the organiser, if necessary assisted by other participants.