Recommendation
In publishing the book

Introduction: Is finance the cause of low growth?
Low growth and sluggish investment in the Korean economy
Asset bias in finance
Inequality and Youth Financial Exclusion
The task of reestablishing finance

Part 1: Why Korean Finance Lost Its Way

Chapter 1: Expansion and Structural Characteristics of Korean Finance
1.
Financial assets outpacing the real economy
2.
Five Structural Factors That Drive the Rapid Growth of Financial Assets
3.
Core Problems in Korea's Financial System
4.
Transition Framework through Innovation in Industrial Finance, Policy Finance, and Capital Markets

Chapter 2: Industrial Cycle vs. Financial Cycle
1.
A cyclical perspective on capitalism
2.
The difference between industrial and financial cycles
3.
A Historical Discussion of Economic Thought on the Separation of Industry and Finance
4.
Historical Trends: The Rise of the Financial Cycle and the Weakening of the Industrial Cycle
5.
Why the financial cycle overwhelms the industrial cycle
6.
Should we suppress or restructure the financial cycle?
7.
Time to reset the direction of the cycle

Chapter 3: The Structure of a Debt Economy Centered on Mortgage Loans
1.
Financial product characteristics and current status of housing mortgage loans
2.
Why Home Mortgage Loans Became the Center of Korean Finance
3.
The Background of the Rapid Rise in Household Debt/GDP Since 2008
4.
The mechanism of mortgage loans that raise asset prices
5.
The impact of expanding mortgage lending on the overall economy
6.
Qualitative Changes in Household Debt and the Key Role of Mortgage Loans
7.
Characteristics of Korean Home Mortgage Loans in International Comparison
8.
Comparing Mortgage Loans and Derivatives: Risks and Consequences
9.
Crisis signals and the possibility of a 'slow collapse'
10.
The effects and limitations of mortgage loan regulations (LTV, DSR, etc.)
11.
Future Challenges of a Mortgage-Centric Financial System

Chapter 4: Inclusive Finance for Young People and the Asset-Loss Class
1.
Why the youth and asset-less class?
2.
International Trends and Implications for Youth Inclusive Finance
3.
Youth definancialization and financial exclusion
4.
Analysis of the Structural Causes of Financial Exclusion
5.
Youth Financial Exclusion in International Comparison
6.
The Social Consequences of Youth Financial Exclusion
7.
The Need for Youth Inclusive Finance

Chapter 5: The Role and Restructuring of Regional Finance
1.
The significance and importance of local finance
2.
Theoretical Basis of Regional Finance
3.
Why Japan's regional finance sector is thriving
4.
Structural Problems in Korean Regional Finance
5.
Best practices abroad (Japan, Germany, USA)
6.
The government's role in strengthening local finance

Part 2: Restructuring Strategies for Productive Finance

Chapter 6 What Should Finance Circulate?
1.
Money is circulating, but where does it go?
2.
Theoretical Foundation: Insights from Keynes and Schumpeter
3.
The Reality of Korean Finance: Circulating Assets Instead of Industries
4.
The social costs of financial circulation and international comparisons
5.
Criteria for production-oriented financial circulation

Chapter 7: The Separation of Industry and Finance: Causes and Consequences
1.
Turning points since the 1990s
2.
Globalization and Financial Liberalization: Korea's Structural Vulnerabilities and Consequences
3.
The structural consequence of the separation of industry and finance

Chapter 8: Possibility of Restructuring the Industrial and Financial Cycle
1.
Lessons from Korea's historical experience
2.
Lessons from overseas cases
3.
Policy Implications for Korea
4.
The direction of a productive financial system to pursue

Chapter 9: The Possibility of Private Finance's Industrial Transition
1.
Structural constraints on private finance
2.
Conditions that enable conversion
3.
Implications from Overseas Cases
4.
Four Key Challenges for Transforming Private Finance
5.
Structural Limitations and Critical Reflection

Chapter 10: The Role of Policy Finance Institutions
1.
Why do we need policy finance institutions?
2.
Types and functions of policy finance institutions
3.
The current state and role of Korea's policy finance institutions
4.
Comparison of policy finance institutions in major overseas countries
5.
The Relationship Between Policy Finance Institutions and Private Finance: Three Models and Current Status

Part 3: The Light and Shadow of the Neoliberal Financialization Era

Chapter 11: A Core Diagnosis of the Neoliberal Financial Phenomenon
1.
Ten Phenomena of the Neoliberal Financial Era
2.
The generalization of financialization
3.
Maximizing shareholder value
4.
Debt-led Growth
5.
Expansion of financial markets and derivatives
6.
Real Estate Bubble and the Wealth Effect
7.
Liberalization of capital movement and financial globalization
8.
Financialization of Monetary Policy: Central Banks' Prioritization of Financial Markets
9.
Short-term performance pressures and the rise of hedge funds and private equity firms
10.
Perpetual Crises
11.
The real economy's deepening dependence on financial institutions

Conclusion: The Path to Financial Reform for 3% Growth and an Inclusive Economy
Comprehensive Implications of Chapter 11
The historical trajectory and structural problems of the Korean financial system
The impact of external dependence and changes in the global financial environment
Weakening of industrial and regional finance and disruption of economic circulation
Vulnerability of household debt structure and financial stability risks
Combining Financial and Industrial Policy: A Condition for Sustainable Growth
Overcoming the neoliberal financial phenomenon and restoring the public nature of finance.
Comprehensive Financial Policy Recommendations for 3% Growth and an Inclusive Economy
Financial Reform Strategy to Alleviate Polarization

References

“From real estate finance to productive finance!”
A new financial innovation roadmap to revitalize the Korean economy!

“If money circulates only in financial transactions and does not flow into the real economy,
“The economy will lose its vitality.”

Where do the problems facing the Korean economy today—low growth, high housing prices, excessive household debt, and deepening polarization—come from?

The Korean economy is now trapped in the shadow of its assets rather than being an engine of growth.
In a society where 'money earned from assets' is greater than 'money earned from work', and in a structure where finance increases housing prices rather than fostering businesses, young people are losing the ladder of opportunity, and the real economy is losing its vitality.
This book, "Productive Finance," diagnoses this reality as "the result of the wrong flow of financial circulation from industry to assets," and identifies the cause as a structural failure of the financial system, stating, "What is needed now is not the amount of money, but the direction of money."


The author finds it in the structural failure of the financial system that created a world where 'the price of housing, not the wages derived from production and labor, determine one's life.'
It provides a sharp diagnosis of the pathological structure in which finance fails to flow into productive investment in the real economy and is stuck in a "financial cycle" centered on transactions in unproductive assets such as real estate and stocks.
Amidst the surge in asset prices and the collateral-centric financial structure, young people and the asset-less class are unable to overcome the barriers to institutional finance, and finance has transformed from a "ladder of hope" to a device that confirms the unattainable upper class.
This book exposes the vulnerabilities of a debt economy centered on mortgage loans and accurately diagnoses the problems of a centralized financial system that marginalizes young people and local economies.


However, the virtue of this book lies in not stopping at diagnosing the problems of the Korean economy but also suggesting solutions.
The answer is ‘a shift to productive finance.’
In other words, it presents a concrete strategy for transitioning to productive finance that directs the flow of finance from unproductive assets such as real estate to the real economy and innovative industries. It also presents a new roadmap for financial innovation that will revitalize the Korean economy through suggestions for redefining the role of policy finance, differential application of discipline, and comprehensive policies to achieve 3% growth and alleviate polarization.
In that respect, this book is a comprehensive strategy book that presents a financial innovation strategy to address the contemporary challenges of structural low growth and extreme polarization in the Korean economy.


From financial to industrial circulation
─ Blueprint for New Growth

This book does not stop at analyzing the pathological structure of the Korean financial system.
The author suggests a return from the financial cycle of 'real estate collateral → loans → rising asset prices' to the industrial cycle of 'investment → production → employment → income → consumption → reinvestment' as the first step toward economic recovery in Korea.
This book presents three strategies for restructuring Korean finance.


First, it is ‘productive transformation of finance and restoration of industrial cycle.’
A structural shift that returns the flow of finance to industrial circulation is a top priority. Policy finance must go beyond compensating for market failures and become a crucial strategic catalyst for restructuring the entire economy around industrial circulation.
Recognizing that private finance struggles to voluntarily engage in industrial finance due to inherent constraints such as soundness regulations and profitability principles, it is necessary to establish policy supplementary measures, such as differential risk weighting for loans to innovative companies, to provide institutional incentives for private capital to flow into industry.


The second is ‘building an inclusive financial system.’
To this end, they argue that, first of all, to resolve youth and regional marginalization, low-interest, unsecured loan programs or basic financial systems for youth and the asset-less class should be introduced, thereby restoring finance to its function as a ladder for asset accumulation and social mobility.
Furthermore, to prevent the outflow of local funds and enhance the self-reliance of local economies, we must revitalize local banks and regional financial institutions through regulatory differentiation that reflects regional specificities, as in Japan, and link this with support for specialized regional industries.


The third is ‘recovery of democratic governance and publicness.’
To this end, it is necessary to democratize finance and restore its public nature so that finance can function as a public infrastructure for social stability beyond a tool for private gain. In addition, it is necessary to establish an industrial finance council, a public-private cooperation platform in which the government, financial institutions, and industry participate, to organically combine financial and industrial policies. In addition, it is argued that the performance evaluation criteria of policy finance institutions should be shifted from short-term 'profitability' to 'social contribution and industrial effect', so as to encourage a focus on long-term innovation and job creation.


These author's solutions can be said to be not only the theoretical foundation for the Lee Jae-myung administration's "transition to productive finance," but also specific implementation plans.


“If finance only operates with real estate and assets as collateral,
“New industries and innovative companies cannot grow.”

It most clearly reveals the core spirit of “productive finance.”
When finance invests in people and the potential for innovation, rather than the value of assets, 3% growth and an inclusive economy are no longer impossible dreams but achievable national strategies.
This book is not simply a critique of finance.
This is a comprehensive reform strategy that designs a structural transformation of Korean finance, encompassing policy finance, private finance, and regional finance.
To revitalize the growth mechanism of the Korean economy, we carefully design how finance must change.

This book goes beyond simply supplementing government policy; it encompasses both policy and theory, exploring a new path for Korean finance.
It persuasively presents a shift from real estate-centered finance to industry-centered finance, and from profit-centered finance to social circulation-centered finance.
"When finance revitalizes people, industries, and regions, that is 'productive finance.'" This book is for everyone seeking a new paradigm shift in the Korean economy.

Structure and main contents of this book

This book is structured in three parts, including an introduction and a conclusion.
First, in the 'Introduction', the author states that the low growth and asset inequality of the Korean economy are due to the structural distortion in which finance is not flowing into productive investment in the real economy, but rather into unproductive assets such as real estate and stocks, and that to overcome this, a productive shift that directs the flow of finance from 'financial circulation' to 'industrial circulation' is an urgent task.

Part 1, "Why Did Korea's Finance Lose Its Way," analyzes the structural problems and historical background that led to the Korean financial system losing its function as a core infrastructure for the real economy and losing its way.
We analyze the rapid expansion of financial assets in Korea and its characteristics (Chapter 1), and contrast the current reality in which the economic cycle is being overwhelmed by the financial cycle, which aims to increase asset prices, from the industrial cycle, which promotes production and employment (Chapter 2).
In particular, it emphasizes that Korea's debt economy is structured around mortgage loans, accumulating household debt and promoting the rise of real estate markets and financial asset prices, but its contribution to the real economy is minimal (Chapter 3).
Furthermore, this paper delves into the problems of how these systems exacerbate financial exclusion among young people and the asset-poor, thereby perpetuating social inequality (Chapter 4), and weakening the role of local finance, thereby diminishing the vitality of local economies (Chapter 5).

Part 2, "Restructuring Strategies for Productive Finance," presents specific strategies and solutions to restructure the financial system in a productive and inclusive direction, helping the Korean economy escape the trap of low growth and inequality.
The central question of Part 2 is, "What should finance circulate?" The author argues that finance should circulate industry and innovation, employment and income, and social stability, rather than assets (Chapter 6).
To this end, we diagnose the structural causes of the separation of finance and industry since the 1990s (Chapter 7) and emphasize that policy finance institutions should go beyond simply compensating for market failures and become strategic catalysts for restructuring the entire economy around industrial cycles (Chapter 8).
Furthermore, it is acknowledged that it is difficult for private finance to voluntarily transition to industrial finance due to structural constraints such as soundness discipline (BIS regulation) and profitability logic (Chapter 9), and it is argued that policy finance institutions are essential in filling the gaps in the market that private finance finds difficult to handle, such as long-term and uncertain innovation investments, support for strategic industries, and regional finance, and that ultimately, they must function as important strategic catalysts that go beyond simply supplementing market failures and reorganize the entire economic structure around industrial cycles (Chapter 10).


Part 3, "The Era of Neoliberal Financialization: Its Light and Shadow," examines how the structural problems of the Korean financial system stem from the broader global trend of neoliberal financialization, and systematically diagnoses ten key characteristics of this phenomenon (Chapter 11).


In the "Conclusion," the author argues that overcoming the phenomenon of liberal financialization and restoring the public nature of finance are key to the Korean economy overcoming the "triple crisis" of low growth, inequality, and financial instability. To achieve this, comprehensive financial reform is required, shifting the flow of finance toward productive investment and establishing a new financial paradigm that combines publicness, equity, and stability.