This study examines the impact of the sharp increase in Korea Treasury Bond (KTB) issuance following the COVID-19 crisis and analyzes the effects of bond buybacks as a policy countermeasure. Using a dynamic Nelson-Siegel model with macroeconomic factors, we estimate the effects of changes in the bond supply on the yield curve. Empirical results show that a KRW 1 trillion increase in KTB issuance raises yields by approximately 2.5 to 2.9 basis points, with stronger effects observed in the post-COVID period and in medium- to long-term maturities with weaker demand. Conversely, emergency buybacks reduce yields by about 1.9 to 2.1 basis points, with similar maturity dependent dynamics. These findings highlight the importance of demand conditions in amplifying the interest rate effects of government bond supply shocks.

The Effects of Increased Korea Treasury Bond Issuance on the Yield Curve
　I. Introduction
　II. Literature Review
　III. Overview of the Government Bond Market
　IV. Empirical Model and Estimation Method
　V. Data and Summary Statistics
　VI. Empirical Results
　VII. Conclusion
　APPENDIX
　REFERENCES