EconPapers    
Economics at your fingertips  
 

Trade, Reform, and Structural Transformation in South Korea

Rubina Verma, Rahul Giri and Caroline Betts
Additional contact information
Rubina Verma: Instituto Tecnologico Autonomo de Mexico (ITAM)
Rahul Giri: International Monetary Fund

No 1530, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: We develop a quantitative two country, three-sector model to measure the effects of trade policies for Korean structural change from 1963 through 2000. The model features non-homothetic preferences, Armington trade, proportional import tariffs and export subsidies, and is carefully calibrated to match sectoral value added production and value added trade between Korea and the OECD. We find that tariff liberalization increased imports and total trade, especially agricultural imports, accelerating de-agriculturization and intensifying Korean industrialization. Subsidy liberalization lowered exports and trade, especially industrial exports, attenuating industrialization. Thus, these effects of trade reform were individually powerful, but negated each other. Korea’s subsidy reform dominated quantitatively; relative to a “no reform” regime which maintains both 1963 tariff and subsidy rates forever, observed trade reform produces comparable but lower trade volumes, a larger agricultural and lower industrial employment share, and slower industrialization. “Complete reform”, lowering tariffs and subsidies to zero from 1963 onwards, would have substantially increased trade volumes and facilitated industrialization.

New Economics Papers: this item is included in nep-dge and nep-int
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://economicdynamics.org/meetpapers/2017/paper_1530.pdf (application/pdf)

Related works:
Journal Article: Trade, Reform, and Structural Transformation in South Korea (2017) Downloads
Working Paper: Trade, Reform, And Structural Transformation in South Korea (2013) Downloads
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:red:sed017:1530

Access Statistics for this paper

More papers in 2017 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

 
Page updated 2019-05-24
Handle: RePEc:red:sed017:1530