Korea's Growth‐Driven Trade Policies: Inclusive or Exclusive?

16 Pages Posted: 13 Nov 2017

See all articles by Moonsung Kang

Moonsung Kang

Korea University - Division of International Studies

Innwon Park

Korea University

Dong‐Eun Rhee

affiliation not provided to SSRN

Date Written: November 2017

Abstract

We attempted to find whether the Korea's growth‐driven trade policies during the period of its industrialisation has contributed to output growth together with income distribution by qualitatively analysing the performance of trade policies interacting with the multilateral trading system over time. In addition, we conducted a regression analysis to investigate the effect of Korea's trade growth on inclusive growth during its industrialisation period covering the period of 1976–2011. We found that the recent reform policies reported in the WTO's Trade policy review for Korea in 2016 have attempted to achieve more balanced distribution of gains from trade but not enough to lead the Korean economy to a well‐balanced welfare state. More specifically, we found the positive effects of international trade on inclusive growth driven by strong output growth effect, not by the effect on income distribution. Even though income distribution measured by Gini indices has been worsened after the East Asian financial crisis, we could not find significant evidence that Korea's rapid international trade growth has been responsible for the deteriorating income inequality.

Keywords: inclusive growth, income inequality, Korea, trade policy, WTO

Suggested Citation

Kang, Moonsung and Park, Innwon and Rhee, Dong‐Eun, Korea's Growth‐Driven Trade Policies: Inclusive or Exclusive? (November 2017). The World Economy, Vol. 40, Issue 11, pp. 2475-2490, 2017. Available at SSRN: https://ssrn.com/abstract=3069223 or http://dx.doi.org/10.1111/twec.12556

Moonsung Kang (Contact Author)

Korea University - Division of International Studies ( email )

145 Anam-ro
Seongbuk-gu
Seoul, 02841
Korea, Republic of (South Korea)
+82232902420 (Phone)

Innwon Park

Korea University ( email )

Dong‐Eun Rhee

affiliation not provided to SSRN

No Address Available

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