Korea's Economy
From the Issue
Korea's Economy Volume 30About Korea's Economy
Korea’s Economy is KEI’s annual journal publication dedicated to the key issues of the day for the Korean economy. Articles in Korea’s Economy are designed to give the casual, but informed reader insight into issues related to Korea’s markets and financial institutions, economic reform, economic relations with the wider world, and North Korea. It is published jointly each year with the Korea Institute for International Economic Policy.
Author: Rudiger Frank
Region: Asia
Theme: Economics, Foreign Relations, Politics
Location: Korea, North, Korea, South, Germany
Published March 4, 2016
Download PDFGerman unification is often used as a preview on what is going to happen in Korea. Such a position is rejected in this article. Not only have the costs of German unification been grossly overestimated or misinterpreted, the costs in the Korean case will in many areas be lower than in Germany, and the benefits of unification will be much bigger, which further decreases the net costs. South Korea will, however, experience problems of a structural nature that have not occurred in Germany. The potential role of external partners for shouldering the costs of unification should also not be underestimated in the Korean case, although it will come at a political price. Finally, a highly speculative but not completely unrealistic scenario of unification is briefly presented that would incur almost no unification costs at all.