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Growth and Convergence in a Two-region Moddel: The Hypothetical Case of Korean Unification

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Author Info

  • Michael Funke

    (Hamburg University)

  • Holger Strulik

    (Hamburg University)

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

Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 212003.

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Length: 26 pages
Date of creation: Oct 2003
Date of revision:
Handle: RePEc:hkm:wpaper:212003

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Related research

Keywords: Korean Unification; Regional Convergence; Economic Growth;

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References

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  9. Marcus Noland, 2000. "Avoiding the Apocalypse: The Future of the Two Koreas," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 94.
  10. Aghion, Philippe & Schankerman, Mark, 1999. "Competition, Entry, and the Social Returns to Infrastructure in Transition Economies," CEPR Discussion Papers 2052, C.E.P.R. Discussion Papers.
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  17. Marcus Noland & Sherman Robinson & Li-Gang Liu, 1998. "The Costs and Benefits of Korean Unification," Working Paper Series WP98-1, Peterson Institute for International Economics.
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  20. 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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  23. Michael Funke & Holge Strulik, 1999. "Growth and Convergence in a Two-Region Model of Unified Germany," CESifo Working Paper Series 206, CESifo Group Munich.
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Citations

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Cited by:
  1. 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.
  2. 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.
  3. 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.

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