[Start Economy] Lee Changyong, "Rate cut, it's not a panacea"...Parent chance? "Under 10 years old, I bought 15 houses".

■ Host: Anchor Lee Jung-seop, Anchor Cho Ye-jin
■ Starring: Professor Heo Jun-young, Sogang University's Department of Economics

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN News START] when quoting.

[Anchor]
We deliver the economic news quickly and kindly. Start Economy, today with Professor Heo Joon-young of Sogang University's Department of Economics. Welcome, professor. As you saw in the video, the audit of the committee was held yesterday, and President Lee Chang-yong attended the meeting. I think there were criticisms about the timing and extent of the rate cut.

[Heo Joon-young]
Shouldn't the ruling party have gotten off first? And the opposition party seems to have lowered interest rates by 0.25 now, but isn't this another anxiety about household debt? I think there have been comments about whether it violates the stability of housing prices. Governor Lee Chang-yong's answer is to respond to various things with one means of interest rates. First, I raised it that way to respond to price stability, and I recently told them to lower interest rates because domestic demand is not good, but they couldn't lower it because the exchange rate until July, the increase in household debt from August, and the increase in housing prices centered on the metropolitan area were too sharp. That's why I recently made a request to evaluate this policy in about a year.

[Anchor]
It seems that there was confusion in the process of household loans, but I don't think it is inevitable to point out that it has caught only end users instead of running around in housing prices.

[Heo Joon-young]
A policy does not determine household debt or housing prices only by interest rate policies. How much is the supply policy? Or it's related to how much policy products are released in financial policy, and recently, from the end of last year to the beginning of this year, a lot of policy products have been released, and the second phase of the stress DSR, which was planned to start in July, has been postponed by two months. What are these things after all? The real estate PF market is so bad in the first half of this year that this is a downside risk to our economy. Then, you have to make a soft landing for this, but in the meantime, the countermeasure was to suddenly increase household debt, so the countermeasure turned to press the increase in household debt again. In that respect, I think you can take it as something like this, saying that it was difficult for the Bank of Korea to keep up with the policy from the perspective of responding to these things with interest rates.

[Anchor]
So in the end, Lee Chang-yong also said that a rate cut is not a panacea. In the end, does the policy mean that we have to work together with the FSS and the Financial Services Commission?

[Heo Joon-young]
You have to look at two things. The first one is right to say in the short term. When the fever rises, you don't know what kind of disease it is, but you have to take a fever reducer and see it. You have to lower your fever and watch it. Then, in the short term, the Bank of Korea, the Financial Supervisory Service, the Financial Services Commission, and the Ministry of Land, Infrastructure and Transport may have to do all of these supply policies. However, from a mid- to long-term perspective, if you look at the recent reports from the Bank of Korea, we are talking about the mid- to long-term structure of Korea, such as education reports and job reports. Then, if you think about why the Bank of Korea is doing the structure, the demand for education is high, and housing prices in Seoul increase and the population continues to rush into the Seoul metropolitan area. In the end, interest rates go up because housing prices in Seoul are so high even when domestic demand is poor. Then, in the end, there are two rabbits, and it may not be possible in the end to catch a rabbit running in the opposite direction with a single stone called Gyuri, and in the mid- to long-term, we have to think about the problems of the nation's economic structure. I think you can take it as saying that this is related to interest rate policy.

[Anchor]
As you said, it was education that the Bank of Korea offered to set up housing prices, but there was a war of words at the National Assembly yesterday over the regional proportional selection system, right?

[Heo Joon-young]
So, stories from Seoul National University, Yonsei University, and Korea University appeared in the National Assembly yesterday. It came up about why the regional proportional selection system is difficult. The reasons are as follows: In the case of Seoul National University, there may be recruitment units that cannot be selected among recruitment units. I think the demand of students in the region may be different. Korea University thinks it's still too early and is already doing something like a balanced regional selection system. Yonsei University also said it was premature, so it should be approached slowly in the mid- to long-term, but President Lee Chang-yong said, "In the case of Seoul National University, there may be a unit that cannot be selected by recruitment unit, so shouldn't we just pick a metropolitan area anyway?" There is a possibility that there are not many high school seniors in Korea who are selected by metropolitan area and have a very clear department they want to go to. On the contrary, some students change their minds after coming to college, so let's think about it from the perspective of demand rather than being too focused on education providers. He also said that only 20% of the refutation of what Korea University said is balanced in the region, but 80% of the local students are in the region, but this is not right. So in the end, this is what education talks about, but in fact, it's one of the most sensitive parts. In that respect, it seems necessary to approach it more slowly and carefully.

[Anchor]
I think we should think about whether it is opening up opportunities or creating another inequality. And one of the reasons why Lee Chang-yong is not a panacea anyway regarding interest rate cuts is that he cut it once, which promotes some employment.It's an observation that there won't be a very macroscopic effect. Then, is there a possibility of lowering interest rates in the future?

[Heo Joon-young]
So, interest rates will go down.I think it's a matter of speed in the end. And the biggest impact on the speed is that for the time being, I think I'll see how fast the increase in household debt and the rise in housing prices centered on the metropolitan area take place. Looking at domestic demand alone, I don't think there will be such a big effect if the interest rate drops by 0.25 now. It will have to get off sooner, but that will stimulate housing prices. In the end, we talked about it at this time the week before or the week before, but there is a shortage of supply. The sale price of apartments continues to rise, and in this situation, the thoughts of end-users that this is actually the cheapest today, how can these thoughts be put to rest. In fact, this is not something that can only be done with interest rate policy, so it requires more policy coordination.

[Anchor]
Interest rates, housing prices, and real estate are continuing. I think I'm very interested in real estate issues in Korea. The results of this survey came out. It is said that a child who is less than 10 years old bought 15 houses, is this the story of our country?

[Heo Joon-young]
Looking at it, there was a minor who owned 21 houses in Gyeongnam, and it turned out that he was under 9 years old. I think he's living in Seoul right now, but there are minors who own 22 real estate. Recently, if you limit it to six years, the average number of homes purchased by minors is about 540 per year. It turns out that the purchase amount is close to 100 billion won. The first question is, where did these things come from? So the first way is through what financing method we bought this. I don't think a nine-year-old would have made money to buy it. And secondly, the second question is, why are you doing this, and I think there are a few things that come to mind about the second question.
I'm sure there's speculative demand for one. The second is tax savings, and the comprehensive real estate tax in Korea is individual taxation. It's not a household tax. For example, if you two own two houses, this is not a multi-homeowner due to individual taxation in the comprehensive real estate tax. In that respect, for those who have one or two or three houses, I think that there is some intention to save taxes, but if there are more than 10 or nearly 20 houses, this is actually a very high demand for speculation rather than tax savings.

[Anchor]
As you said, the inheritance of assets using parental opportunities is something to pay attention to, so polarization and other ordinary people who see it tend to feel a sense of relative deprivation. In a capitalist society, it is not illegal to have your own assets and hand them down. I think you should be concerned about such things as expedient donation.

[Heo Joon-young]
is correct. When I looked up the article, there was the same article this time last year. There was the same article this time last year. What are you talking about? In the end, time is passing and nothing changes. Then in the end, wouldn't there be something we need to do here? In fact, I'm not only saying that these things are going wrong in policy, but I think there should be a response to these things, whether there are any illegal elements.

[Anchor]
Contrary to these bitter findings, there were also welcome findings. Your willingness to give birth to marriage in your 20s and 30s has increased significantly?

[Heo Joon-young]
So, I recently did a survey and compared it to the survey I did in March, five to six months ago, and the rate of respondents to marriage intentions has increased a lot, and then the rate of respondents saying they will have a child and want to have a child has increased a lot, which seems to be a very significant increase. So based on these things, wasn't there good news that one of the things we talked about recently is that the fertility rate is increasing? In that respect, it seems that people's perception of marriage and childbirth is turning a little more positively.

[Anchor]
Anyway, all over the world, and in Korea, low birth rate is a serious social problem. The growing desire to have children like this among young people is, of course, a hopeful part. However, in order for this will to be revealed as a reality, policy factors must be supported in order to act directly.

[Heo Joon-young]
On a large scale, it seems to keep pointing out three things. The first is job insecurity. The second is housing anxiety and the third is child support anxiety. In the case of employment insecurity, the youth employment rate in Korea is lower than in other countries. The proportion of non-regular workers is increasing. And I don't know when you two joined the company, but the age at which you join the company for the first time is being pushed back. That's how fierce the competition is. So, how to respond to job insecurity in that respect. Next, housing insecurity continues to talk about housing costs. Some say it's because it's too expensive, and in the case of child support, the Bank of Korea recently conducted a survey, and when asked why you don't have children, the most common answer is the cost burden, but it's an environment where you can't give birth even if you want to. In my opinion, there is a problem of cost burden, and in relation to the cost burden, the burden of career interruption is too great these days, and don't both men and women work?
Then, in the end, an environment should be created in which children can be raised without sacrificing their careers, and I think it is necessary to approach those areas.

[Anchor]
Also, above all, I think we need a generous social view of the child, but I think there should be a society where we can run around more freely and excitedly. What do you think, professor?

[Heo Joon-young]
Actually, I tend to raise my children freely and excitedly, but I have two children. But I just raise it, thinking it's a kind of American education. But on the other hand, I'm worried. For example, in such a competitive society, can our children eventually overcome the competition? They look happy now, but I'm worried that they will be happy in the future. But in fact, if you think about it, there are questions about whether it is desirable for children's competition to continue to rise like this in the end when the population is declining. I have some concerns about those things.

[Anchor]
an extension or background of such concern In the end, setting up a family, eating well, and living well is the primary concern. However, it seems difficult to eat well and live well at home. The average monthly food cost has increased a lot in five years?

[Heo Joon-young]
And even compared to last year and a year, we included one person per household last year. The monthly average per household was about 830,000 won last year, but this year it was 870,000 won. So, it was up 9% from the previous quarter and up 4.5% from a year ago. Then, looking at how much the average household income has increased compared to this time last year, disposable income, excluding taxes, has increased by about 1%. So, disposable income increased by about 1.2%, but the cost of food increased by 4.5%. Then, in the end, out of our total income, the cost of food is increasing. And one of the more important statistics that I have to pay attention to is that it differs by income quantile. The lowest income quintile, the higher the food and food prices, so the proportion of spending is increasing. The burden is increasing. In the end, there may not be much difference between those who make 10 million won and those who make 1 million won. Then in the end, who will this burden eventually be more concentrated on? It will probably be concentrated on those with low incomes. So, I talked about the Bank of Korea earlier, but Lee Chang-yong also said that at the parliamentary inspection yesterday. The inflation rate itself has fallen to 1.6%, but you have said that the accumulated inflation and snowballs will eventually be a burden, but that seems to be the case.

[Anchor]
The price is high, but the cost of eating out is also high. I'm afraid of eating out once. Most restaurant industries are growing slowly, and among them, the buffet industry is seeing an increase in sales. Gen Z says a lot of people are looking for it, why is that?

[Heo Joon-young]
According to the average sales of restaurants and data from credit card companies, the average sales of restaurants have only increased by 1% on average over the past four years, but rather, sales of buffets have increased by more than 20% for generation Z and people in their 20s, and this is happening by nearly 30%. Actually, I've been to a buffet with my family, and in the case of a salad buffet, a family restaurant, and 30,000 won, if you go somewhere and eat something, it's 30,000 won per person. But the good thing about going to a buffet is that you can eat as much as you want without any pressure. Then one of the ways I can determine the cost-effectiveness in a situation where the price is rising is to go to a place where you can eat as much as you want. And the buffets have a lot of quality. Those things seem to work in general.

[Anchor]
Finally, let's take a look at the New York Stock Exchange. Dow and S&P went up a lot last night.

[Heo Joon-young]
Dow and S&P are rising so much that almost every day seems to break new records in the three major indexes. Yesterday, it was Columbus Day in American time. It's the day Columbus first came to the United States, so he opened the stock market, but he didn't open the bond market. It was a public holiday where most institutions were closed. There was no particular good news or bad news, but anyway, it seems that the recent rise centered on technology stocks continues. Almost every day is a new record.

[Anchor]
I see. I looked at the price news and the stock market news. Today, I was with Professor Heo Jun-young of Sogang University's Department of Economics. Thank you.