The Economic Reunification of Korea: A Dynamic General Equilibrium Model

36 Pages Posted: 5 Oct 2004

See all articles by Scott C. Bradford

Scott C. Bradford

Brigham Young University - Department of Economics

Kerk Phillips

Government of the United States of America - Congressional Budget Office (CBO); Brigham Young University - Department of Economics

Date Written: September 29, 2004

Abstract

This paper constructs a dynamic specific factors model to examine the impact of the economic reunification of North and South Korea. We focus on changes in real wages and output as a result of several kinds of reunification and/or reform. We are interested in the differential impacts on wages of skilled and unskilled workers. As a baseline we assume autarky with internal market reforms in the North, and free trade in most goods for the South. Using both the long-run steady state and the short-run transition to it, we compare this baseline to several scenarios involving increasing levels of reform and unification. We find that skilled wages in the South depend critically on the nature of the reform or unification policy pursued. Wages in the North rise dramatically in almost every case.

Keywords: Factor mobility, dynamic general equilibrium, Korea

JEL Classification: F15, F22, F42

Suggested Citation

Bradford, Scott C. and Phillips, Kerk L and Phillips, Kerk L, The Economic Reunification of Korea: A Dynamic General Equilibrium Model (September 29, 2004). Available at SSRN: https://ssrn.com/abstract=599661 or http://dx.doi.org/10.2139/ssrn.599661

Scott C. Bradford

Brigham Young University - Department of Economics

130 Faculty Office Bldg.
Provo, UT 84602-2363
United States

Kerk L Phillips (Contact Author)

Brigham Young University - Department of Economics ( email )

166 Faculty Office Bldg.
Provo, UT 84602-2363
United States
801-422-5928 (Phone)

HOME PAGE: http://sites.google.com/site/kerkphillips

Government of the United States of America - Congressional Budget Office (CBO) ( email )

Ford House Office Building
2nd & D Streets, SW
Washington, DC 20515-6925
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
153
Abstract Views
1,097
rank
240,113
PlumX Metrics