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Growth and convergence in a two-region model: The hypothetical case of Korean unification

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  • Funke, Michael
  • Strulik, Holger

Abstract

The paper discusses the impact and implications of Korean unification by setting up a two-region endogenous growth model. The numerical solutions are based on the formal analytical model, and have been calibrated so that they reflect the observed features of the North and South Korean economies. The numerical solutions provide evidence about the speed of convergence and the large amount of interregional transfers that would be required to make the North Korean economy economically viable. We also model the impact of foreign aid, migration and borrowing abroad for the transition process.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 16 (2005)
Issue (Month): 2 (April)
Pages: 255-279

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Handle: RePEc:eee:asieco:v:16:y:2005:i:2:p:255-279

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  8. Bradford, Scott C. & Phillips, Kerk L., 2008. "The Economic Reunification of Korea: A Dynamic General Equilibrium Model," MPRA Paper 23550, University Library of Munich, Germany.
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Cited by:
  1. Bradford, Scott C. & Phillips, Kerk L., 2008. "The Economic Reunification of Korea: A Dynamic General Equilibrium Model," MPRA Paper 23550, University Library of Munich, Germany.
  2. Sung Min Mun & Byoung Hark Yoo, 2012. "The Effects of Inter-Korean Integration Type on Economic Performance: The Role of Wage Policy," International Economic Journal, Taylor & Francis Journals, vol. 26(3), pages 447-470, September.
  3. Paul Hare, 2012. "North Korea: Building the Institutions to Raise Living Standards," International Economic Journal, Taylor & Francis Journals, vol. 26(3), pages 487-509, September.

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