Korea’s Paradigm Shift for Sustainable and Inclusive Growth: A Proposal

Yangho Byeon, Kwanghae Choi, Heenam Choi and Jun Kim

No 2017/260, IMF Working Papers from International Monetary Fund

Abstract: Korea is facing mounting economic challenges. Productivity growth has been on a trend decline amid demographic headwinds, while the societal demand for inclusive growth has been on a steep rise. Furthermore, the government-led unbalanced growth model—which served Korea well in the past—has become less effective and politically palatable in recent years. As such, Korea needs a major paradigm shift to embark on a new sustainable and inclusive growth path. But policy response has been modest at best with no major reforms being implemented over the past two decades. We propose a paradigm shift in Korea’s economic framework, involving a simultaneous big push for greater economic freedom and stronger social protection within the parameters set by long-run fiscal sustainability. We also provide a detailed account of structural reforms to boost economic freedom and sustainable funding plans for stronger social protection.

Keywords: WP; debt limit; financial crisis; allocative efficiency; economic growth; unemployment insurance; Economic freedom; social protection; structural reforms; fiscal sustainability; paradigm shift; unbalanced growth; growth paradigm; product market; replacement ratio; income share; high-productivity firm; job market; Korea's immigration; Korea's challenge; productivity slowdown; Income; Income inequality; Labor markets; Global (search for similar items in EconPapers)
Pages: 41
Date: 2017-11-20
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=45423 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2017/260

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().