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Does Korea risk reprising Japan’s lost decades?

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  • Does Korea risk reprising Japan’s lost decades?
  • Katz, Richard
  • International Council on Korean Studies


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Title Does Korea risk reprising Japan’s lost decades?
Similar Titles
Material Type Articles
Author(English)

Katz, Richard

Publisher

[Washington, DC]:International Council on Korean Studies

Date 2014
Journal Title; Vol./Issue International Journal of Korean Studies:vol. 18(no. 1)
Pages 26
Subject Country Japan(Asia and Pacific)
South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Economic Administration
Industry and Technology < General
Holding International Council on Korean Studies

Abstract

Korea has had a stellar growth record over the past half-century, but, like Japan before it, the miracle economy risks becoming a “fallen star.” Economic patterns and institutions that helped it do so well in the “catch-up era,” have now become obsolete. It suffers from a number of structural defects that parallel those that eroded growth in Japan: e.g., pushing labor productivity mainly through capital deepening rather than through Total Factor Productivity; a “dual economy” of super-efficient giant exporters combined with low-productivity, low-wage small- and medium-sized enterprises, particularly in services; and household income constituting too low of a share of GDP to fuel domestic consumer spending power. However, it enjoys some advantages that Japan lacked: first and foremost, the ability to learn from Japan’s sad experience and a recognition by its political leaders that reform is necessary. (The rest omitted)