Bradford, Scott C. and Phillips, Kerk L. (2008): The Economic Reunification of Korea: A Dynamic General Equilibrium Model.
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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.
|Item Type:||MPRA Paper|
|Original Title:||The Economic Reunification of Korea: A Dynamic General Equilibrium Model|
|Keywords:||factor mobility; dynamic general equilibrium; specific-factors; Korea|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration
F - International Economics > F1 - Trade > F15 - Economic Integration
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission
|Depositing User:||Kerk Phillips|
|Date Deposited:||29. Jun 2010 01:58|
|Last Modified:||22. May 2015 21:44|
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