Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278794 
Authors: 
Year of Publication: 
2023
Citation: 
[Journal:] KDI Journal of Economic Policy [ISSN:] 2586-4130 [Volume:] 45 [Issue:] 3 [Year:] 2023 [Pages:] 1-24
Publisher: 
Korea Development Institute (KDI), Sejong
Abstract: 
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 interKorean 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 interKorean 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.
Subjects: 
Inter-Korean Trade
Inter-Korean Relations
GDELT
Peace Effect
Political-Economic Separation
JEL: 
F51
P33
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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