Growth accounting has been widely used to measure the contributions of various factors to economic growth since Robert Solow in 1957. However, growth accounting fails to explain and implicate each contribution when viewing macroeconomy under general equilibrium. This study utilizes general equilibrium theory to analyze the growth of the Korean economy. The general equilibrium model holds microfoundation such as optimizing behavior of economic agents; hence it allows studying of channels in which economic agents optimize in the economy.
The outcomes of the study include: First, in general, Korea's per capital GDP growth rate and the growth rate of total factor productivity for the past two decades showed similar trends; Second, the fall in hours worked appears to be partly attributable to the increase in the wage (income) tax, and in addition, labor market efficiency is found to be improving, since the labor market wedge, which is derived from the equilibrium labor condition, has become smaller. The policy authority should realize the impacts of taxation on the growth of production factor and its implication when making decisions on economic policies; and third, the capital-labor ratio is on the rise, which is a sign of capital deepening, and further it indicates that the economic structure of Korea is now in transition to the capital-intensive industry.
일반균형모형을 이용한 한국경제의 성장 분석(Analysis on the Korea's economic growth using the general equilibrium mode)
|Series Title; No||정책연구시리즈 / 2012-01|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||KDI; KDI School of Public Policy and Management|