Famine in North Korea: Causes and Cures
In this paper we start from incomplete data ridden with gross measurement errors to construct the underlying data base for a computable general equilibrium model (CGE) of the North Korean economy using cross-entropy estimation techniques. This model incorporates fragmentary information in a rigorous way and allows us to examine the implications of a number of alternative scenarios. First, we model a production-oriented recovery program as the restoration of flood-affected lands. We then model an external assistance program as the acquisition of all food aid necessary to attain the United Nations organizations' estimates of minimum human needs. The trade-oriented recovery program is modeled as a relaxation of agricultural import quotas and the importation of food on commercial terms. Finally, we model a systemic reform program as the elimination of quantitative restrictions on all external trade.
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