재정의 지속가능성 평가 = Evaluating Fiscal Sustainability in Korea

다국어 초록 (Multilingual Abstract)

This study reviewed prior studies analyzing fiscal sustainability, formulated a model for evaluating fiscal sustainability, performed unit root and cointegration tests for consolidated fiscal expenditures and revenues in Korea from 1980 through 2009, and then analyzed the short-run dynamic process of correcting fiscal imbalances through consolidated fiscal expenditures and revenues using the vector error correction model. The analytical results reveal that there is a cointegrating relationship between consolidated fiscal expenditures and revenues from 1980 through 2009, including the foreign currency and global financial crises, which indicates fiscal sustainability; whereas there is no cointegrating relationship between these two fiscal variables from 1995 through 2009, after the foreign currency and global financial crises, which indicates fiscal non-sustainability. The empirical results of the vector error correction model show that while in the case of consolidated fiscal deficits consolidated fiscal expenditures decrease, consolidated fiscal revenues increase, thereby solving the disequilibrium of fiscal balances over time. In particular, in the case of fiscal imbalances, the disequilibrium of fiscal balances converges to equilibrium conditions through the adjustment of fiscal expenditures and revenues in the long run, but the adjustment speed of fiscal expenditures turns out to be faster than that of fiscal revenues. This implies that much more importance should be attached to expenditure-based consolidations policy than revenue-based consolidations policy to reduce fiscal deficits.