Income-led Growth and Wage Inequality in the Korean Economy (1980-2013): A VAR /VECM Approach
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In this paper, I test the relationship between economic growth and income distribution in the Korean economy. In recent years, a widening gap between wage-earners and income distribution has become an important issue in the Korean economy. Thus, the VAR/VEC framework, which takes account of the historical pattern of wage inequality in Korea, is used to investigate a complicated effect of income distribution on economic growth in recent decades. In this paper, I identify the cointegrating vectors to establish the long-term relationship between the variables and the use of the impulse responses of each variable for investigating the short-term effects of each exogenous shock using the VAR approach. This study suggests that the income-led growth perspective will not inspire research about the Korean economy if the income-led growth perspective should not be enough to account for Korea’s wage inequality.
Abstract
In this paper, I test the relationship between economic growth and income distribution in the Korean economy. In recent years, a widening gap between wage-earners and income distribution has become an important issue in the Korean economy. Thus, the VAR/VEC framework, which takes account of the historical pattern of wage inequality in Korea, is used to investigate a complicated effect of income distribution on economic growth in recent decades. In this paper, I identify the cointegrating vectors to establish the long-term relationship between the variables and the use of the impulse responses of each variable for investigating the short-term effects of each exogenous shock using the VAR approach. This study suggests that the income-led growth perspective will not inspire research about the Korean economy if the income-led growth perspective should not be enough to account for Korea’s wage inequality.
참고문헌 (27)
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