Dollarization in North Korea: Evidence from a Survey of North Korean Refugees

Sung Min Mun () and Seung Ho Jung ()
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Sung Min Mun: The Bank of Korea
Seung Ho Jung: The Bank of Korea

East Asian Economic Review, 2017, vol. 21, issue 1, 81-100

Abstract: This study measures the degree of dollarization in North Korea using results from a survey of 231 North Korean refugees. Specifically, we compare foreign currency use of households as both store-of-value substitutes (i.e., asset substitution) and transaction substitutes (i.e., currency substitution) before and after the confiscatory currency reform of 2009. The degree of dollarization has advanced since the currency reform in terms of both asset and currency substitutions. Survey results also indicate that the Chinese yuan is frequently used in the Sino-North Korean border area, whereas the US dollar is predominantly used in non-border areas. Furthermore, foreign currency increasingly serves as a medium of exchange not only for large transactions but also for smaller transactions, such as food purchases.

Keywords: North Korea; Dollarization; Confiscatory Currency Reform; Asset Substitution; Currency Substitution (search for similar items in EconPapers)
JEL-codes: E26 E42 P20 P30 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:eaerev:0324

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