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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 26, No. 4, pp.433-452
ISSN: 1225-0279 (Print)
Print publication date 30 Nov 2013
Received 03 Jun 2013 Revised 31 Oct 2013 Accepted 04 Nov 2013

Initial Conditions, Economic Performance, and Reform Prospects in North Korea

Hyung-Gon Jeong
Senior Research Fellow, Korea Institute for International Economic Policy, Seocho-ku, Seoul, Korea, Tel: +82-2-3460-1127, Fax: +82-2-3460-1125 hgjeong@kiep.go.kr

JEL Classification: F59, P20

Abstract

This study aims to predict the possible changes in the North Korean economic system by examining 27 countries that have experienced economic transition since 1990. This study divides the 27 transition countries into three groups (i.e., outstanding, fine, and poor transition) through discriminant analysis based on the outcomes of economic reforms over the past two decades. The discriminant analysis reveals that North Korea can be classified into the poor transition group and is likely to follow the pattern of the Commonwealth of Independent States. Pyongyang must realize that transition from its rigid socialist economy to a market economy is the only way to escape from poverty.

Keywords:

North Korea (DPRK), Economic transition

Acknowledgments

This study is based on “The Current Situation of Marketization in North Korea and Prospects for Changes in Its Economic System,” a Korea Institute for International Economic Policy (KIEP) report published in Korean by Jeong, H. G., et al. in 2012. The author of the current study thanks two anonymous referees and the editor of this journal, whose patience with an earlier version of this paper is greatly appreciated. Their suggestions have significantly improved this paper. Errors in this paper are the responsibility of the author.

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Web sites

  • http://www.bok.or.kr/broadcast.action?menuNaviId=2236, (Bank of Korea)
  • https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html, (CIA 2012The World Fact book)
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