 Long-Term Projection for the Growth Pattern and Industrial Structure of the Korean EconomyJin-Myon Lee (),
Young Ho Lee (),
Bawoo Kim (),
Jung Min Han () and
Jae-Jin Kim ()
No 13/3, Occasional Papers from Korea Institute for Industrial Economics and Trade Abstract: This paper aims to conduct long-term projections about the organizational changes in the Korean economy and industry. The KIET–DIMM (KIET Dynamic Inter-industry Macroeconomic Model) was developed into KIET–DIMM12 to conduct this research. The KIET–DIMM is basically designed to achieve balance between industrial demands and supplies based on Walras’ general equilibrium theory in microeconomics and the equilibrium over aggregate demand and supply in macroeconomics. The KIET-DIMM12 is updated with population/household block based on KIET–DIMM consisting of demand-supply, price/technology, foreign, and macroeconomy blocks. The GDP average annual growth rate is expected to be 3.75% in the 2010s and 2.87% in the 2020s. The proportion of consumption to GDP is expected to increase from 67.8% in 2010 to 69.6% in 2030 and investment’s proportion to GDP is expected to decrease from 28.3% in 2010 to 26.4% in 2030. In terms of industrial structure, the ratio of the manufacturing industry compared to total industry would be downsized by the decrease in relative prices, while that of the service industry would persistently increase because of some diversified and gentrified service demands and increase in leisure activities. The ratio of exports of the manufacturing industry is expected to increase while that of the service industry would decrease, reflecting the characteristics of domestic oriented industry. On the other hand, the ratio of imports is projected to decrease in the manufacturing industry and increase in the service industry. The growth rate of labor demand is expected to slow down due to sluggish GDP growth, improvement of productivity, and rise of flexibility of the labor market. The policy implications from this research are as follows. It is necessary to narrow the gap between domestic demand and exports to establish countermeasures to alleviate the polarization between light and heavy and chemical industry. Finally, the competitiveness of the service industry must improve to prepare for a service industry-focused expansion of the economy. Keywords: general equilibrium theory; manufacturing; service; macroeconomics; macroeconomic projection; macroeconomic outlook; long-term outlook; macroeconomic forecasting; export forecasting; industrial structure; industrial structure analysis; industrial polarization (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ris:kietop:2013_003 Access Statistics for this paper More papers in Occasional Papers from Korea Institute for Industrial Economics and Trade Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.