IDEAS home Printed from https://ideas.repec.org/a/tpr/asiaec/v1y2002i3p69-89.html
   My bibliography  Save this article

Understanding North Korea's Economic Crisis

Author

Listed:
  • Deok Ryong Yoon

    (Korea Institute for International Economic Policy 300-4, Yomgok-Dong, Socho-Gu Seoul 137-747 Korea)

  • Bradley O. Babson

    (2800 Russell Road Alexandria, VA 22305 USA)

Abstract

This paper provides an overview of the current economic situation in North Korea and suggests some possible strategies for recovery, including ways of mobilizing financing and implementing essential market reforms. Throughout the 1990s, North Korea suffered a severe economic downturn after the abrupt collapse of the cooperative network of socialist countries. Because the needs of the military had been given first priority and foreign trade was limited, infrastructure and capital stock deteriorated. At present North Korea is in a poverty trap, and the plans of the State Planning Commission no longer work. In addition to the "official" economy, North Korea's overall economic structure includes economies run by the Workers Party, the military, and ordinary citizens (the informal market). Efforts to promote foreign investment and trade, combined with only small changes in this inefficient economic structure, are unlikely to succeed. North Korea's economic rehabilitation should begin with more market-oriented policy reforms and capital formation, but because the country is unable to design and implement economic reforms or to accumulate capital stock on its own, assistance must be sought from outside. Copyright (c) 2002 Center for International Development and the Massachusetts Institute of Technology.

Suggested Citation

  • Deok Ryong Yoon & Bradley O. Babson, 2002. "Understanding North Korea's Economic Crisis," Asian Economic Papers, MIT Press, vol. 1(3), pages 69-89.
  • Handle: RePEc:tpr:asiaec:v:1:y:2002:i:3:p:69-89
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/153535102320894009
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kim, Byung-Yeon & Kim, Suk Jin & Lee, Keun, 2007. "Assessing the economic performance of North Korea, 1954-1989: Estimates and growth accounting analysis," Journal of Comparative Economics, Elsevier, vol. 35(3), pages 564-582, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:asiaec:v:1:y:2002:i:3:p:69-89. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristin Waites). General contact details of provider: http://mitpress.mit.edu/journals/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.