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North and South Korean Economies Compared

  • Eui-Gak Hwang
Part of the St Antony’s Series book series

Abstract

The comparability of two economies based on different systems, one on the market economy and the other on central planning has many pitfalls. In particular, North and South Korea differ in their respective methods of compiling and measuring aggregate economic variables and other statistics.1 In capitalist market economies, GNP is the total value of all final products and services produced during a given period of time. The aggregate material product (AMP) accounts of a command or centrally planned economy (CPE), however, record productive activity taken on a given territory and cover the sum of the outputs of all separately enumerated production units. One pitfall of this accounting method is that it involves double counting since the values of intermediate products are included in the value of consecutive production. This problem does not, however, exist in the CPE’s definition of National Income (NI). National Income of the CPE is the sum of net product (value added) of all separately enumerated branches of the economy but this measure does not include the so-called non-productive services such as research and development, banking, insurance, education, health, administration and military. The second pitfall involves the reliability and consistency of the available data, the estimates of macro-economic variables as well as growth rates. These problems are related to diverse values used in measuring national outputs, foreign exchange rates and price indices.

Keywords

Exchange Rate Capita Income Korean Peninsula National Income Consumption Expenditure 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes

  1. 1.
    See Eui-Gak Hwang, The Korean Economies: Comparison of North and South (Oxford: Clarendon Press Oxford, 1993) Ch. 3.Google Scholar
  2. 2.
    Paul Marer, Dollar GNPs of the USSR and Eastern Europe (Baltimore: The John Hopkins University Press, 1985) p. 20.Google Scholar
  3. 5.
    State Planning Commission (Pyongyang), North Korea’s Statistics 1946–60(1961)Google Scholar
  4. 7.
    Jon Halliday, ‘The Economics of North and South Korea’ in John Sullivan and Robert Foss (eds), Two Koreas — One Future? (Baltimore: University Press of America, 1989) p. 42.Google Scholar
  5. 10.
    World Bank, World Development Report 1985 (Washington, DC: World Bank, 1985).CrossRefGoogle Scholar
  6. 20.
    See Nanak C. Kakwani, Income Inequality and Poverty: Methods of Estimation and Policy Applications (Washington DC: A World Bank Publication, Oxford University Press, 1980) pp. 386–9 for Income Shares, Gini Index, and a Measure of Skewness of the Lorenz Curve in Fifty Countries, and for Inter-country Comparison of Income Inequality.Google Scholar

Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1997

Authors and Affiliations

  • Eui-Gak Hwang

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