Economics: Research Guide

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened Pointing to the fact that large foreign firms are allowed to sell used cars in Korea, domestic carmakers called for an end to restrictions on their participation in this market space. The Ministry of SME’s and Startups is reportedlylooking intoallowing conglomerates to reenter the used car market under specific conditions. 51.6% of the public is in favor of allowing conglomerates to partic..

By Randall S. Jones After two quarters of large declines, real GDP increased 7.9% at a seasonally-adjusted annual rate (saar) in 2020Q3, according to the advance estimate released on October 27 by the Bank of Korea (table below). The rebound, Korea’s strongest quarterly growth rate since 2010, reflects its effective response to the coronavirus pandemic. The government’s approach of mass testing and contract tracing has helped Korea avoid the economy-wide lockdowns that hindered economic activity in many countries. In addition, a strong fiscal and monetary policy response, including four supplementary budgets amounting to 66.8 trillion won (3.7% of GDP), supported domestic demand. Real GD..

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened Universal basic income hasgainedpublic support in South Korea as the government attempts to ride out the economic slowdown from COVID-19. Programs spearheaded by local governments that distribute cash to residents for use within the community serve as pilots for a wider proposal. Receiving the most attention, the program in Gyeonggi Province pays a quarterly cash pay-outs to its residents &#..

KEI’s 2020 Report on American Attitudes Toward the Korean Peninsula focuses on U.S. views on relations with South Korea, U.S. awareness of South Korean brands and cultural products, and views on North Korea and was conducted by YouGov. The results reveal that while Americans have a favorable view of South Korea and about half are supportive of maintaining U.S. troops on the Korean Peninsula, few Americans watched or listened to Korean cultural products in the last year. Americans also view North Korea as one of the three critical challenges for the United States, but fewer than 1-in-3 approve of the administration’s handling of North Korea. Some key insights from the survey inclu..

By Randall S. Jones The 2020 OECD Economic Survey of Korea released last month stressed that Korea’s economic contraction in 2020 is relatively mild compared to other advanced countries. Nevertheless, it will leave durable scars that heighten the need to tackle the challenges of population aging and low productivity. To address these challenges, the Survey focuses on raising employment, enhancing job quality and promoting the diffusion of technology. This is the 17th OECD Economic Survey of Korea, including two that were published before Korea joined the OECD in 1996. The economic outlook and macroeconomic policies to support growth The OECD now projects that Korea’s real GDP will declin..

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened The National Assembly has approved three supplementary budgets worth nearly USD 50.5 billion combined, setting a record high of totalUSD 431 billionof annual expense. Despite these increases, Korea’s debt to GDP ratio of43.5%remains below the OECDaverage(109.2%) and that of other peer economies like the United States (106.9%), France (122.5%), and Japan (224.1%). Nonetheless, government of..

By Phil Eskeland “As Vice President… [Joe Biden] backed the horrendous South Korea trade deal, which took many jobs from our country which I reversed and made a great deal for our country.” Remarks of President Donald J. Trump upon accepting the Republican nomination for President, August 27, 2020 (President’s extemporaneous remarks in italics) Last Thursday night, President Donald Trump accepted the Republican nomination for a second term as President of the United States. Every speech at political events contains embellishments, and this one was no exception. President Trump’s remarks returned to the main themes that have animated his political beliefs for most of his lifetime, p..

By Randall S. Jones Following a 5.0 percent decline in the first quarter of 2020, real GDP fell 12.7 percent at a seasonally-adjusted annual rate (saar) in the second quarter (table below), the largest decrease since the Asian financial crisis more than two decades ago. Despite Korea’s success in limiting the spread of the coronavirus and its large-scale fiscal response to boost the economy, it was unable to escape the economic impact of the pandemic and avoid a recession. Stabilization of domestic demand, while exports collapsed Private consumption rebounded with growth of 5.5 percent (saar) in 2020Q2, reflecting strong purchases of durable goods. Consumption was supported by the easing o..

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened A recent report from the Korea Development Institute reiterated that the South Korean economy remains under severe strain due to the reduction in global trade. However, the report also noted that consumer spendingincreased1.7% in May after a 2.2% reduction in April. This creates greater expectation for domestic consumption to drive the economic recovery from the pandemic-induced economic hur..

By Hyungim Jang The coronavirus pandemic poses a new challenge for the Moon administration’s ongoing efforts to boost domestic employment, especially for the youth. Some predict that young Koreans will become part of a “lost generation” as a consequence. However, national initiatives under the banner of a “Korean New Deal” are attempting to forestall this looming economic crisis. Moon Administration’s Past Youth Employment Policies When Moon Jae-in came into office in May 2017, the youth unemployment rate was at 9.3%. To address this issue, President Moon announced the following plans to bolster youth employment: Increase the employment quota for young people (age 15-34) from 3 t..

By Neha Cariappa South Korea’s pop culture wave (or Hallyu) is making its mark in India. As recently as five years ago, Indians would have only recognized singer PSY and his hit song “Gangnam Style.” Now, the K-pop genre has become more “mainstream” and it’s not unusual for Indians living in cities to express interest in K-pop and other Korean cultural content. In a survey conducted by the Korean government about how people in other countries saw Korea, almost 92% of Indian respondents answered that K-pop was the most agreeable initiation to Korea and its culture. To explore the kind of influence that Hallyu is having on young Indians today, I conducted an online survey of Indian..

At the Korea Economic Institute of America (KEI), we foster connections to advance United States-Republic of Korea ties. Through bringing together people with an interest in topics of importance to this relationship, KEI works to further mutual understanding between our two countries. As the world copes with the ongoing pandemic and its economic fallout, the sharing of ideas is of even greater importance. Our 2020 Academic Symposium, through which we endeavor to bridge the academic and policy communities, contributes to understanding crucial questions at a key time in the Asia-Pacific. The International Studies Association (ISA) annual conference in Honolulu, Hawaii scheduled for March 2020 ..

This paper reviews China’s technological rise and assesses whether it poses a threat to the South Korean economy. In terms of comparative advantage between the two countries, many experts have long believed that China’s strength is low-cost labor and Korea’s is technology and capital. However, this has changed as China’s economy grows. Now China has enough capital to invest in its economy. Some scholars even argue that China has the potential to meet its “innovation imperative” and emerge as a driving force in innovation on a global level.1 This paper examines the Korea-China economic relationship from the innovation productivity perspective, organized int..

American ideals coupled with the commercial self-interest of American business and industry drove the policy of engagement, and even after the 1989 massacre of student protesters at Tiananmen Square, sustained momentum for China’s accession into the WTO. Despite China’s known unfair trade practices, it was thought that problems would eventually disappear as China adopted rules and norms as conditions of its accession to the WTO while deepening its integration into the global trading system. Yet, despite this strategy of engagement, China has not implemented expected substantive structural reforms consistent with the spirit, if not the letter, of its WTO obligations. Over the past..

By Randall S. Jones The Moon administration’s fiscal policy was expansionary even before the coronavirus pandemic. With government spending increasing more than 9% in both 2019 and 2020, the OECD projected last year that Korea’s budget surplus, which was nearly 3% of GDP in 2018 (on a general government basis), would disappear in 2020. The additional spending to support the economy during the pandemic, combined with falling tax revenues, will likely result in a significant budget deficit this year. In fact, the OECD Economic Outlook released on June 10th projects a budget deficit of around 3% of GDP this year, with gross government debt rising as high as 44% of GDP in 2021. The necessary..

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened The Blue Houseconfirmedthat a “Green New Deal” would be a component of a Korean New Deal that President Moon announced on May 10. This confirmation followedurgingfrom the environmental group Greenpeace for Moon to set a positive example for combating climate change as South Korea addresses the economic downturn caused by the pandemic. The Moon government has already pledged toimplementa ..

By Stephan Haggard According to a story in NK News by Jan Seul Gi, the North Korean government has taken the initiative to issue government bonds; several astute analysts of the Korean economy have picked up on the story (Tom Byrne at Foreign Policy here and Benjamin Katzliff Silberstein at 38North here). As with all such stories, we need to take it with the appropriate grain of salt. Nonetheless, the particular details reported by their informants are highly plausible. The episode provides another piece of evidence that the regime is coping with significant financial distress from the combination of sanctions and the economic effects of the border closures with China as a result of COVID-19..

By Randall S. Jones Korea’s Success in Containing the Coronavirus Pandemic Korea has been able to contain the coronavirus thanks to the prompt implementation of effective policies. The number of new daily COVID-19 cases peaked at 909 on 29 February. At that point, Korea had the second-largest number of recorded cases in the world after China. Government policies and the efforts of its citizens enabled Korea to “flatten the curve,” reducing the number of new cases to below ten per day (figure below). The mortality rate, with less than 250 deaths nationwide thus far, is also low compared to many countries. Korea’s successful response has prompted more than 120 countries to request its ..

By Troy Stangarone North Korea’s decision to put in place strict border controls and quarantines at the onset of the COVID-19 outbreak in China continues to have a significant effect on trade as new March trade figures with China show even sharper declines than the figures for the January-February period. According to China’s General Administration of Customs, North Korea’s exports to China fell to only $616,000 last month, down from a combined $10.7 million in January and February. This is by far the lowest monthly North Korean export figure to China since the United Nations began placing stricter sanctions on North Korean exports in 2016. The previous low was $9.4 million in February..

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened In early April, the operator of South Korea’s biggest food delivery application “Baedal Minjok (Baemin)” beganchargingrestaurant owners and franchisees a 5.8 percent commission for every online order. Gyeonggi Province Governor Lee Jae-myung criticized Baemin andpushedfor the launch of a public food-delivery app that would benefit delivery workers, restaurant owners, and app engineers...

By Stephan Haggard and Jeongsoo Kim The economic success of the Asia-Pacific has rested in no small measure on its finely-tuned supply chains. These global production networks are coming under stress from the COVID-19 crisis, but also from the new political economy of trade. The U.S.-China trade war has had as one of its stated objectives a “decoupling” from China, which of necessity means reducing American dependence on Chinese suppliers. The history controversy that sparked the downward spiral in Japan-Korea relations threatens a similar eventuality. We now have interesting survey data from Korea on how these effects operate. The data suggest that uncertainty about even small amounts o..

As COVID-19 continues its global spread, the economic implications are anticipated to be significant. Depending on magnitude of spread, the fall in Korea’s real GDP is estimated at between 0.51% to 1.02%. Similar headwinds are expected for the United States (-0.36 to 0.72%) and China (-0.91 to -2.03%), alongside the world-at-large (-0.57 to -1.13%). Demand for intermediate and capital goods from Korea’s major trading partners are expected to decline. For context, during initial stages of Influenza A outbreak in the United States (April‒August 2009), U.S. imports declined by 13.1% in total, and 11.4% from Korea (against pre-pandemic levels). Intermediate goods (including capital..

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened The Blue House announced that17 countrieshave officially requested testing kits from South Korea. According to the Ministry of Food and Drug Safety,seven companieshave been licensed to export their coronavirus testing kit. All companies authorized by the government were small and medium-sized enterprises (SMEs). These SMEs had begun developing diagnostic kits in January and had obtained expo..

By Kyle Ferrier Earlier this week I covered major risks to the South Korean economy from a financial crisis caused by COVID-19. While South Korea is particularly susceptible to the worsening economic fallout from the pandemic, it is far from helpless. Rough experiences with past financial crises, namely the 1997-1998 Asian Financial Crisis, have led Seoul to build up resiliencies over the years to handle the next one. With another crisis seemingly on its way, this blog takes a look at some of the tools at Seoul’s disposal to help mitigate the economic damage. The Tools Available Fiscal and monetary policy South Korean President Moon Jae-in’s economic policies have centered on government ..

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened South Korea’s agricultural industry isstrugglingwith labor shortage as the outbreak of coronavirus is hampering the entry of seasonal migrant workers to South Korea. Last year, South Korea began allowing seasonal migrant workers tostay longerin the country in an effort to tackle labor shortage problems in the agricultural industry. In 2019, there were3,479 seasonal migrant workersin the ag..

Under President Moon Jae-in, South Korea has set an ambitious target to move from being “first in the world” in the race to 5G to “first in global quality.” Yet, while a range of industry and government stakeholders are investing heavily in making this vision a reality, a number of factors are likely to weigh on whether or not these efforts yield significant results. These include uncertainties about how to further accelerate development in ways that lead to better returns on investments, and about how to navigate complex geopolitical considerations, including ongoing debates about Huawei’s involvement in 5G network infrastructure. Each of these areas will, in t..

By Troy Stangarone According to a recently leaked UN 1718 Committee report, North Korea exported 3.7 million metric tons of coal in the first eight months for 2019 despite UN sanctions prohibiting North Korean coal exports. Earning the regime $370 million, these exports help explain how Pyongyang has been able to finance its trade deficit. Moreover, it potentially disproves the widely-held assumption that North Korea’s smuggling activities are untenable in the long-term because of the added costs. The UN estimates suggest that illicit exports of North Korean coal increased by nearly 300 percent by value and volume from May through August compared to the first four months of the year. The U..

This briefing comes fromKorea View, a weekly newsletter published by the Korea Economic Institute. Korea View aims to cover developments that reveal trends on the Korean Peninsula but receivelittle attention in the United States.If you would like to sign up, please find the online formhere. What Happened On February 12, Deputy Prime Minister and Finance Minister Hong Nam-ki warned that the coronavirus could enhanceuncertainties in the domestic labor market. Report from the Korea Development Instituteechoedthese concerns. Statistics Korea revealed that the number of jobs occupied by people in their 40sdeclined for 51 consecutive months. Significant share of the new jobs added in 2019 went to ..