The Economic Reunification of Korea: A Dynamic General Equilibrium Model
This paper constructs a dynamic specific factors model to examine the impact of the economic reunification of North and South Korea. The model is a compromise between the highly stylized neoclassical models of trade found in the theoretical trade literature, and the highly aggregated models used in dynamic macroeconomics. We find that the policies with the biggest effects on aggregate output are changes in government tax and spending rates, particularly spending on infrastructure. In contrast, we find that both skilled and unskilled wages are much more responsive to the particulars of trade policy, particularly openness to intra-Korea trade and intra-Korea labor mobility. The location of production in a fully integrated Korean economy is determined by the location of infrastructure.
|Date of creation:||Feb 2008|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christiano, Lawrence J, 2002.
"Solving Dynamic Equilibrium Models by a Method of Undetermined Coefficients,"
Springer;Society for Computational Economics, vol. 20(1-2), pages 21-55, October.
- Lawrence J. Christiano, 1998. "Solving Dynamic Equilibrium Models by a Method of Undetermined Coefficients," NBER Technical Working Papers 0225, National Bureau of Economic Research, Inc.
- Lawrence J. Christiano, 1998. "Solving dynamic equilibrium models by a method of undetermined coefficients," Working Paper 9804, Federal Reserve Bank of Cleveland.
- Funke, Michael & Strulik, Holger, 2005. "Growth and convergence in a two-region model: The hypothetical case of Korean unification," Journal of Asian Economics, Elsevier, vol. 16(2), pages 255-279, April.
- Michael Funke & Holger Strulik, 2003. "Growth and Convergence in a Two-region Moddel: The Hypothetical Case of Korean Unification," Working Papers 212003, Hong Kong Institute for Monetary Research.
- Michael Funke & Holger Strulik, 2005. "Growth and Convergence in a Two-Region Model: The Hypothetical Case of Korean Unification," Quantitative Macroeconomics Working Papers 20505, Hamburg University, Department of Economics.
- Marcus Noland, 2000. "Avoiding the Apocalypse: The Future of the Two Koreas," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 94, 03.
- Kose, M. Ayhan, 2002. "Explaining business cycles in small open economies: 'How much do world prices matter?'," Journal of International Economics, Elsevier, vol. 56(2), pages 299-327, March.
- Jonathan Eaton, 1987. "A Dynamic Specific-Factors Model of International Trade," Review of Economic Studies, Oxford University Press, vol. 54(2), pages 325-338.
- Jonathan Eaton, 1984. "A Dynamic Specific-Factors Model of International Trade," NBER Working Papers 1479, National Bureau of Economic Research, Inc.
- Marcus Noland & Sherman Robinson & Ligang Liu, 1999. "The economics of korean unification," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 3(3), pages 255-299.
- Marcus Noland & Sherman Robinson & Li-Gang Liu, 1997. "The Economics of Korean Unification," Working Paper Series WP97-5, Peterson Institute for International Economics.
- Albert, Max & Meckl, Jurgen, 1998. "Qualitatively Rational Expectations and Adjustment in the Specific-Factors Model," Review of International Economics, Wiley Blackwell, vol. 6(4), pages 670-682, November. Full references (including those not matched with items on IDEAS)