An Approach for Building a CGE Database for the North Korean Economy

Abstract

Since it is difficult for researchers to access data for the North Korean economy, they typically choose a proxy economy for estimating the economic impact of the unification of the two Koreas using a computational general equilibrium (CGE). This paper aims to identify the best proxy economy for North Korea out of the 140 economies (countries) in the Global Trade Analysis Project (GTAP) database version 9.1, which was published in mid-2015. (Ed- if your study aim is ‘to identify the best proxy economy for North Korea’, then you must state your study finding here in the abstract, and also in the conclusion, i.e., Romania) This paper evaluates the input-output (IO) tables for the North Korean economy in existing studies. Comparing the coefficients for North Korea in existing studies with those of the countries selected for this paper, substantial differences were found, especially for the services sector. This casts some doubt on the IO tables in the existing studies on the North Korean economy.