Forecasting Korea's Economy and the Cost of Reunification

by Charles Wolf, Jr.

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Restructuring and reforming the South Korean economy so it resumes and sustains its high growth trajectory is a formidable problem that will engage the attention of policy makers in the coming years. Reunification of the peninsula, while a separable problem, will in the longer term merge with the restructuring of the South Korean economy. While the eventual costs of reunification will add a further burden, these costs can be limited and managed in ways that need not impose an insuperable burden on the economy's continued progress. The paper presents a simple model of Korean reunification costs that supports this conclusion.

Originally published in: Patterns of Inter Korean Relations, Bae Ho Hahn and Chae-Jin Lee, ed., Sejong Institute,1999, pp. 163-184.

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