The Peace Effects of Inter-Korean Trade and the Political-Economic Separation: Analysis of the Reciprocal Effects of Inter-Korean Relations and Inter-Korean Trade
This paper empirically examines the relationship between inter-Korean trade and inter-Korean relations over the past three decades. It asks two questions: (1) Does inter-Korean trade contribute to improved inter- Korean relations and peace on the Korean Peninsula? (2) Does improved inter-Korean rela...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Korea Development Institute
2023-08-01
|
| Series: | KDI Journal of Economic Policy |
| Subjects: | |
| Online Access: | https://kdijep.org/v.45/3/1/The+Peace+Effects+of+Inter+Korean+Trade+and+the+Political+Economic+Separation+Analysis+of+the+Reciprocal+Effects+of+Inter+Korean+Relations+and+Inter+Korean+Trade%E2%80%A0 |
| Summary: | This paper empirically examines the relationship between inter-Korean trade and inter-Korean relations over the past three decades. It asks two questions: (1) Does inter-Korean trade contribute to improved inter- Korean relations and peace on the Korean Peninsula? (2) Does improved inter-Korean relations lead to increased inter-Korean trade? The study employs a time-series causal relationship analysis methodology to answer these questions. The findings show that during the progressive government’s reign, inter-Korean trade was not impacted by inter-Korean relations. This is due to the implementation of a political-economic separation policy towards North Korea. Moreover, the increase in general trade and processing on commission did enhance inter-Korean relations, reflecting the “inclusive policy” aimed at achieving peace on the Korean Peninsula through inter-Korean trade. In contrast, during the conservative government’s reign, inter-Korean relations had a direct impact on inter-Korean trade, with deteriorating relations leading to a significant decrease in trade. This was due to the implementation of North Korea policies that were linked to politics and the economy. |
|---|---|
| ISSN: | 2586-2995 2586-4130 |