Examination of the Restructuring of Korean Economy: Simulation of the Multisector Model (Written in Korean)

Abstract

The Korean economy has sustained high growth rate for almost three decades, that have been associated with the rapid expansion of manufacturing industries. In the beginning stage of development, the high growth of the Korean economy has been based on improvements in productivity obtained by the economies of scale. In that period the improvements in productivity could be secured by the economies of scale in the export-oriented industries which are the labor- and material-intensive industries. In the latter half of the 1980s, the Korean economy went through rapid transition. Now Korea is at another juncture in its development process, where economic restructuring is critical to sustain high growth. However, economic restructuring in the 1990s call for much more concerted effort than before, since changes in internal and external conditions have profoundly altered the environment for economic development. If Korea is to sustain high growth in the 1990s, it has to promote balanced economic and social development in coordination with the smooth facilitation of industrial restructuring. There are no inherent conflicts among the issues involved, so they can be resolved by restructuring the economy to facilitate, in a global context, the development of knowledge and technology-intensive activities and to ensure that the benefits of growth are reflected of qualitative improvements in national living standards. In this paper, we examined a scenario of structural changes using a mid- and long term multisector model, in order to understand the conditions needed for realizing the growth potential. This examination explains the important features of the development course and policy directions that will help sustain high growth in the 1990s.