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Title Analysis of Koreas Long-Term Growth Process and Lessons for Sustainable Development Policy
Author Hyeok Jeong (Seoul National University)
Volume 34 Number 2
Pages 237-265 
Keywords Koreas Development Experience, Long-Term Growth Process, Sustainable Development Policy, Middle Income Trap, Growth Accounting, Productivity, Human Capital
Abstract This paper analyzes Koreas growth process, not only rapid but also sustained for six
decades at 6% per year. The sources of such growth were balanced among labor market
demographic factors, capital investment, human capital accumulation, and productivity
growth. However, the main engine of growth evolved sequentially, e.g., labor and human
capital factors in the 1960s, capital deepening in the 1970s, and then productivity growth for
the following periods. We found that major sources of the six-decade sustained growth were
productivity growth and human capital accumulation rather than the expansion of labor
force or capital investment. Counterfactual analysis of neoclassical growth model reveals
that the accelerated productivity growth after the fast capital deepening was the key to
Koreas long-term growth, avoiding the middle-income trap. Appropriate calibration of the
neoclassical growth model allowing time-varying transitional growth parameters explains
Koreas growth experience well and provides useful lessons for sustainable development
File KER-20180701-34-2-06.pdf
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