South Korea’s economic miracle is a well-known story. However, today Korea is confronting a new set of internal and external risks, which may foreshadow the next crisis. The Korean economy has been struggling with the faltering growth momentum and the rise of unprecedented socio-economic problems over recent years well before the pandemic crisis. After abrupt downshifts to markedly slower growth in the early 2000s, economic growth has continued to decelerate. Koreans are grappling with slow income growth, all time-high household debt, high youth unemployment, inequality, and social polarization. Politics is in disarray and is incapable of directing social discourse for the common good. Rapid population aging along with the world’s lowest fertility rates stokes fears of Japanification. Simultaneously, disruptive technologies and fast-changing business environment such as the rise of China clash with a range of long-standing structural problems. The contemporary challenges are radically different from those seen in the early stages of industrialization. There are multiple risks that threaten to self-perpetuate low or stagnant growth over the next decade or so, if not an outright financial crisis.
Motivated by these latest developments, this book seeks to provide a timely and in-depth analysis of key current issues and foreseeable challenges of the economy, with a provocative reassessment of its future. Based on extensive new empirical works, it examines the underlying causes of the socio-economic problems. In a constructive spirit, it puts in perspective what would constitute critical elements of ideal policy solutions and the direction of the future government’s role.
Jaejoon Woo is an Economics Professor at DePaul University. Previously, he was Chief Korea Economist at Bank of America Merrill Lynch (BAML) and was also Senior Economist at the IMF and Economist at the OECD. He was an advisory committee member for Ministry of Strategy and Finance. He wrote over 145 market-oriented research notes on Korea at BAML, and published 3 books and 32 articles, including in the leading economics journals such as Review of Economics and Statistics, Journal of Public Economics, European Economic Review, and Journal of Development Economics. His works are featured in The Economist and Financial Times.
Source: publisher’s website
Part 1: Longer-term Outlook, Challenges, and Issues
1:Introduction: Overview of Contemporary Issues and Challenges
2:(Why) Is the Current Recovery So Different from the Past?
3:Taking the Long View of Economic Growth, Part 1: Recent Growth Deceleration, Convergence Debate, and Structural Issues
4:Taking the Long View of Economic Growth, Part 2: Population Aging, Private Debt, and Japanification Risk
5:Social Polarization and Inequality of Income and Wealth
6:Jobs and Wages: Sectoral Shifts, Technological Change, and Structural Rigidities
Part 2: Political Economy of Economic Policy
7:Are There Political Business Cycles in Korea?
8:Korean Presidents and Major Policy Agenda over the Last Three Decades
9:Korea’s Monetary policy and Challenges for the Bank of Korea
10:Looming Fiscal Challenges: Polarization, Populism, Population Aging, and Debt
Part 3: Trade, Capital Markets, and Currency
11:A Case for Korea as a Developed Market?
12:Korea Joins the League of Wealthy Nations
Part 4: North Korea
13:North Korea: Known Unknowns and Unknown Unknowns
Part 5: Epilogue