Dec 31, 1987
This Note supports the Korea Institute for Defense Analysis/RAND Corporation study of the defense economics effort of North Korea over the next decade. The study assesses the ability of North Korea to sustain high levels of military expenditures by using a building-block approach to estimate certain parts of the national accounts from physical production data. As a part of this effort, this Note estimates how large a share of North Korean GNP is accounted for by nonmilitary consumption. Since the North Korean economy had only limited external trade relationships during the 1970s, these estimates are made by inferring the value of food consumption from the value of agricultural output. Given the value of food consumption, it is then possible to determine the value of total nonmilitary consumption. The subject matter would be of interest to specialists concerned with the North Korean national accounts. The methodology used would be of interest to those concerned with the economics of centrally planned economies.