Growth and Convergence in a Two-Region Model: The Hypothetical Case of Korean Unification

Michael Funke and Holger Strulik

No 2002/026, IMF Working Papers from International Monetary Fund

Abstract: The paper discusses the impact and implications of Korean unification by setting up a two-region endogenous growth model. The numerical solutions are based on the formal analytical model, and have been calibrated so that they reflect the observed features of the North and South Korean economies. The numerical solutions provide evidence about the speed of convergence and the large amount of interregional transfers that are required to make the North Korean economy economically viable.

Keywords: WP; fiscal policy; Korean Unification; Regional Convergence; Economic Growt; government policy; policy rule; consumption-capital ratio; budget constraint; depreciation rate; economic development; government share; regime design; Income; Capital budget; Infrastructure; Wages (search for similar items in EconPapers)
Pages: 24
Date: 2002-02-26
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Related works:
Journal Article: Growth and convergence in a two-region model: The hypothetical case of Korean unification (2005)
Working Paper: Growth and Convergence in a Two-Region Model: The Hypothetical Case of Korean Unification (2005)
Working Paper: Growth and Convergence in a Two-region Moddel: The Hypothetical Case of Korean Unification (2003)
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