1. The Costs and Benefits of Korean Unification
- Author:
- Marcus Noland, Sherman Robinson, and Li-gang Liu
- Publication Date:
- 03-1998
- Content Type:
- Working Paper
- Institution:
- Walter H. Shorenstein Asia-Pacific Research Center
- Abstract:
- Existing estimates of the costs of unification are inadequate for a number of reasons. In this paper we use a dynamic computable general equilibrium model to calculate South Korean and total peninsular income streams under a variety of unification (and non–unification) scenarios. We find that there are scenarios in which the present discounted value of South Korean income is higher with unification than without it. Although lower income groups in South Korea experience reduced incomes under this scenario, with redistribution of the gains, everyone can be made better off. Indeed, this scenario, which involves relatively low levels of South Korean private investment in the North together with relatively high levels of North–South migration, is also the one which generates the highest level of total peninsular income as well. The latter point is critical in that it suggests that there is no necessary conflict between the economic interests of North and South Koreans after unification.
- Topic:
- Security, Economics, International Organization, and Political Economy
- Political Geography:
- Israel, East Asia, and Korea