Social Development Introduced in Economic Models: An Application to Past Korea

Abstract

The paper explores quantified ways of incorporating social development goals and basic needs indicators in economy-wide models. We evaluate the welfare and productivity effects of higher satisfactions against the costs involved, and examine the optimal ordering of various social and economic development goals in the policy making process. The model is applied to the Republic of Korea during its period of takeoff. The modelling application demonstrates high degrees of positive complementarities between social development and economic growth in the Korean context that can be replicable elsewhere.