The Second Economy in North Korea

Hong-Tack Chun

Senior Fellow, Korea Development Institute, 207-41 Choungyang, Seoul 130-012, Korea, Tel: +82-2-961-5092 htchun@kdiux.kdi.re.kr

JEL Classification: P29

Abstract

This paper shows that the second economy plays a significant role in North Korea and complete picture of total economy cannot be obtained if one looks at only the planned sector of the economy. It also shows that presence of the second economy puts pressure on the first economy for change and the expansion of the second economy results in rising tensions between the first (planned) and the second (private) economy and undermining the socialist values.

Acknowledgments

I would like to thank two anonymous referees for helpful comments. All remaining errors are naturally my responsibility.

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