[Gwanga in] Investigation Bureau vs Economic Research Institute... 'Research Competition' within the Bank of Korea

Within the Bank of Korea, which establishes monetary and credit policies, a competitive atmosphere regarding 'high-quality research' is emerging. Traditionally, the core research department at the Bank of Korea was the Survey Bureau, responsible for forecasts, but recently, as the Economic Research Institute has gained influence, an implicit competition between the two departments seems to have developed.

This is related to the Bank of Korea recently raising its voice on government policies and releasing in-depth reports. For example, regarding demographic issues, the Economic Research Institute's report titled "Extreme Demographic Structure Causes, Impacts, and Measures of Ultra-Low Fertility and Ultra-Aged Society," released in the second half of last year, received widespread acclaim from various sectors outside the Bank of Korea and created a significant impact.

Hwang Indo, head of the Macroeconomic Research Office at the Economic Research Institute, who led the report's preparation, was invited as an expert to several government ministry meetings related to low fertility policies, gaining recognition for his research achievements. Hwang was promoted to Grade 2 in the recent Bank of Korea personnel reshuffle, which some interpret as evidence that research achievements have a tangible impact on organizational standing.

On the demographic issue front, the Survey Bureau is also conducting detailed research on other topics. Governor Lee expressed concern at a seminar co-hosted with the Korea Chamber of Commerce and Industry last year, stating, "In the context of population aging, if things continue as they are, young people will be limited to caring for their elderly parents." He proposed bringing in foreign labor to expand the care and nursing sectors. Currently, the Survey Bureau's Price and Employment Department is preparing a related report. This report, which began research last year, was originally planned for publication this month, but due to the Governor's strong interest, the release has been delayed as more effort is put into it.

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Governor Lee strengthened the Economic Research Institute by recruiting Lee Jae-won, an external figure and professor at Seoul National University's Department of Economics, as the institute's director last year, elevating the position from bureau chief level to the current 'special grade' deputy governor level. Recently, as the first half of Governor Lee's term is ending and internal personnel matters have been finalized, there is greater scope to focus on the mid- to long-term issues he has emphasized. At the joint academic conference of the Korean Economic Association earlier this month, he expressed his concerns in a dinner speech by presenting five mid- to long-term research tasks related to monetary policy to academia: conditional forward guidance, utilization of financial intermediary support loans, estimation of the neutral interest rate, directions for improving central bank lending systems, and the relationship between open market operations and the short-term money market.

The competitive atmosphere between the two departments is also evident in the recent expansion of doctoral-level recruitment at the Bank of Korea. A personnel team official at the Bank of Korea explained, "Whether in the Survey Bureau or the Economic Research Institute, doctoral-level hiring has always been limited to a handful each year. This year, however, we recruited 21 people in the first half alone, showing a trend of expansion compared to previous years."

An Economic Research Institute official said, "We also plan to release reports related to entrance exam education and climate change this year. As the number of tasks increases, we are making greater efforts to actively secure personnel this year. We expect that more than 60% of the newly hired doctoral researchers will join the Economic Research Institute." A Survey Bureau official also explained, "Previously, we hired one or two people sporadically every one to two years, but this year, to strengthen research competitiveness, we posted announcements to hire more experts."

A Bank of Korea official remarked, "Internally at the Bank of Korea, research related to institutional matters or short-term economic issues is roughly divided to be conducted by the Survey Bureau, while mid- to long-term issues are researched by the Economic Research Institute. However, there are certainly overlaps in the broader context. In such cases, unintended competition is inevitable, but this can naturally lead to improvements in research quality," he hinted.

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