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Growth and Convergence in a Two-Region Model: The Hypothetical Case of Korean Unification

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Author Info
Michael Funke ()
Holger Strulik ()

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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 it reflects 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 are required to make the North Korean economy economically viable.

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Paper provided by Hamburg University, Department of Economics in its series Quantitative Macroeconomics Working Papers with number 20505.

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Date of creation: May 2005
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Handle: RePEc:ham:qmwops:20505

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Related research
Keywords: Korean Unification; Regional Convergence; Economic Growth;

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Find related papers by JEL classification:
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
H40 - Public Economics - - Publicly Provided Goods - - - General

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