The Impact of the COVID-19 Pandemic on Korea’s Regional Economies

Duyong Kang (dykang@kiet.re.kr) and Seong-hwan Min (shmin@kiet.re.kr)
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Duyong Kang: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr
Seong-hwan Min: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr

No 21/13, i-KIET Issues and Analysis from Korea Institute for Industrial Economics and Trade

Abstract: This paper estimates the impact of the COVID-19 pandemic-induced recession on Korea's regional economies. It finds that the recession has hit the island province of Jeju and the cities of Incheon and Ulsan the hardest, in that order. For Jeju in particular, it was estimated that the province's real gross regional domestic product (GRDP) declined by 9% compared to the pre-pandemic trend, a figure 2.5 times greater than the estimated impact of the pandemic on nationwide GDP growth. The paper describes implications for policy carried by the analysis. It makes two key suggestions: the government could either work to strengthen support for the industries and subsectors in the deepest slumps, or provide direct support for economies in the hardest-hit regions.

Keywords: COVID-19; recession; macroeconomics; disaster aid; crisis management; disaster response; Korea; Jeju; regional economics; subsidies; support; bailouts; government support; corporate welfare (search for similar items in EconPapers)
JEL-codes: E32 H12 H25 H32 H71 H84 R10 R11 R50 R58 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2021-06-29
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