The Importance Of Trade Policy Reforms In South Korea’s Growth And Development

Adopting neoclassical growth models

Write about the Annotated Bibliography on Import Substitution Model for GDP.
 

The paper sheds light on the importance of trade policy reforms in the growth and development process of South Korea. Adoption of neoclassical growth model has enabled the economists to make significant contributions in increasing the GDP. Theoretical considerations have assisted in simulating the tariffs, which predominated the economy between 1962 and 1989. The article stresses on the period of 1961, when the Gross Domestic Product of Penn World Tables, South Korea was 7% as compared to that of the United States[1]. Trade policy can be seen as an answer to the question proposed by the article. Consideration of “reform” is appropriate in terms of ensuring growth and development of powers like Korea. Shift of focus from import substitution to exports acts as a deviation from the topic of the assignment. However, it contributes to the economy as a whole. Moreover, policy systematizes the trade activities, which contradicts the aspect of “miracle”. 

The article enhances the awareness of the readers about the marketing policies, which resulted in the growth of Republic of Korea. Oversimplification of the growth model has clarified the doubts of the economists in terms of exporting the produced goods[2]. Theoretical consideration has resulted in trade promotion. Variety in implementation of the policies highlights the causal relationship between economic growth and external sector. Strategic approach in implementation of the policies enhances the status of the firms involved in the competition. This enrichment of the status exempted them from the requirement of protection. The article warns the readers not to consider Korea’s success as the “outcome of liberalization”. Instead, it needs to be perceived as “strategic”. Typical evidence of this lies in the 5.24% increase in the average growth rate in the phase 1950 to 2015. This growth resulted in the advent of industrialization.

The article focuses on industrialization in South Korea, which defined economy of 1970. Example is taken of Hyundai, which contributed in economic growth. The plan of “Four Core Plants Plan” can be considered as an agent towards ensuring efficiency of the trade activities. The major drive behind this is the “policy’, which ensures efficiency of the trade activities. Failure of the government staffs nullifies the achieved success[3]. Planning for plants can be directly related with the economic growth. This is because of strategy, which helps in ensuring smooth functioning of the import and the export activities. Delving deep into the aspect of “second tier”, it can be related to the functions of the government personnel. 

Simulating tariffs

The article projects the importance of strategies, which resulted in the growth of South Korea. The phase of 1962-80 has been taken as an example for enhancing the awareness of the readers regarding the export, which was the basic nature of industrialization. The adjective “rapid” fails to break the systematic approach of the trade. Policies and theoretical frameworks are the agents, which assisted the personnel to carry out the trade activities in an efficient and effective manner. Technological development can be related with the word “miracle”, as it created wonders in every developmental aspect[4]. “Policies” are the agents, leading to the aristocratic transformation. Effective implementation of the policies justifies the phrase “man-made miracle”. The credit of transformation needs to be given to the plans regarding equal distribution of income.

This article directly focuses on the growth policy adopted by Korea. Export oriented strategies assisted the multi-lateral institutions, which planned to capture the markets of Africa and Latin America. The article, particularly, assesses whether the policies are feasible in responding to the “structural external surplus”. Korea emerges successful in its development at a time when all of the developing countries are encountering sluggish economy[5]. The major drive behind this is the policy, which helped in coping up with the weaknesses. Policies have created an upsurge in the performance of the trade. This is the stage, which sets the stage of comparison between US and Korea. The article also projects the consequences faced by US due to the industrialization practiced by Korea. 

The paper deals with variables like technological innovation, which is a prime factor in the growth and development of the multinational companies in Korea. Challenging the validity and the reliability of the product lifecycle model can be related with the aspect of “revisiting”. This is an evaluation, which discovers the need for innovation within the activities carried out. The paper narrows the vision of the product lifecycle model[6]. As a matter of specification, the article narrows the vision of innovation, which contradicts the life cycle of the product. Contradictions can also be established about the statements that innovations generate in the home country. Innovations generate in the minds of the people while dealing with the business matters and aspects.

Reframing of the global policy is a humanly approach of the article in terms of ensuring the wellbeing of the society. Herein lays the appropriateness of the aspect of “social investment”. Theoretical frameworks are an agent, which has been portrayed as the agent towards the achievement of sustainable growth. Planning for indulging in the partnership with the developed economies can be considered as a strategic approach. Consideration of the importance of policies in the developed economies justifies the process of making growth “inclusive”[7]. This can also be considered as a “collaborative attempt towards the achievement of growth and development. Undertaking the potential challenges is a wise step in terms of assessing the stately welfare. 

Focus on export-oriented strategies

The article assesses how Korea emerged successful in overcoming the financial crisis. Plotting the crisis of 1997 is a wise step in terms of taking the readers to the flashback. The common fact in this is the mismanagement, which contradicts the strategic and theoretical framework. Along with this, bankruptcy aggravated the complexities, reducing the GDP largely in case of some of the countries. Decrease in the investment ratio resulted in slight recovery in the economy[8]. The article establishes a comparative study with that of Asian economy. This analysis enhances the awareness of the businesspersons regarding overcoming the economic challenges rationally, effectively and efficiently.  

The article attempts to find the importance of growth driven trade policies in the economy. The measures undertaken for this attempt is income distribution. Consideration of multilateral trading system proves beneficial in terms of maintaining the pace with the current competitive phase. The method of regression analysis assists the economists to perceive Korea’s growth as “inclusive” of the industrial factors. The article conducts review of trade policy published by WTO[9]. However, it was found that “balanced distribution of gains” did not prove fruitful in ensuring the stately welfare. International trade on inclusive growth brought positive effects rather than the income distribution. This implies that inclusion of all the economic aspects reflects relevancy in terms of planning for economic development. The importance of planning places inclusive growth on a high pedestal, which acts as a response for the question posed by the name of the article.

The article peeks into the role of the Federal and State Government of Korea for assessing the approach towards globalization. The article makes the businesspersons aware of the fact that globalization of the national corporations and neopolitical liberalism are not related to the innovation of the domestic capabilities. As a comparative study, United States market is selected. Here, a possibility is kept that offshoring can result in the growth of the firms[10]. Besides, the article also keeps a space for the thought that fissures in industrial linkages at home and foreign can reduce the innovative capability of US.

Crises are inevitable in one financial year. Advent of crisis stalls the productivity, making it difficult for the businesspersons to carry out trade related activities. Crisis phase reflects the true exercise of a corporate mind in terms of overcoming the potential challenges. Herein lays the effectiveness of planning, which proves beneficial in seeking ways of restoring the lost balance[11]. Policies are an effective example of reducing crisis. Here, inclusive factors are tax tariffs, which create an obstacle in the trading activities. Along with this, the role of the Korean government is also important in terms of assessing the approach towards attaining globalization. Here, rationality leads to the development of growth driven trade policies, which helps in the achievement of positive outcomes[12].  

References

Berasaluce, Julen, and José Romero. “Economic Growth and the external sector: evidence from Korea, lessons for Mexico.” Estudios Económicos (México, DF) 32.1 (2017): 95-131.

Choi, Young-Jin, and Jim Glassman. “A geopolitical economy of heavy industrialization and second tier city growth in South Korea: Evidence from the ‘Four Core Plants Plan’.” Critical Sociology 44.3 (2018): 405-420.

Connolly, Michelle, and Kei-Mu Yi. “How much of South Korea’s growth miracle can be explained by trade policy?.” American Economic Journal: Macroeconomics 7.4 (2015): 188-221.

Dornbusch, Rudiger, et al. “Korean growth policy.” Brookings Papers on Economic Activity 1987.2 (1987): 389-454.

Kang, Moonsung, Innwon Park, and Dong?Eun Rhee. “Korea’s growth?driven trade policies: Inclusive or exclusive?.” The World Economy 40.11 (2017): 2475-2490.

Kim, Kwan S. “The Korean Miracle (1962–80) Revisited: Myths and realities in strategies and development.” Asian industrialization and Africa. Palgrave Macmillan, London, 1995. 87-143.

Kim, Kyung Mi, and Hyeong-Ki Kwon. “The State’s Role in Globalization: Korea’s Experience from a Comparative Perspective.” Politics & Society 45.4 (2017): 505-531.

Kwon, Huck-ju. “The challenges of inclusive growth for the developmental welfare state.” Reframing Global Social Policy: Social Investment for Sustainable and Inclusive Growth(2017): 99.

Shabbir, M. S., and A. K. Rehman. “The impact of financial crises and economic growth of East Asian countries.” The Journal of Internet Banking and Commerce 21.1 (2016).

Tolentino, Paz Estrella. “Technological innovation and emerging economy multinationals: the product cycle model revisited.” International Journal of Technology Management74.1-4 (2017): 122-139.