Professor Lee Jong-hwa of Korea University, President of the Korea Economic Association, Thesis
“Korea’s economic growth rate will average 0.9% per year between 2050 and 2060”
If the population continues to decline due to a low birth rate and an aging population, the growth rate of the Korean economy is predicted to decrease to an annual average of 0.9% between 2050 and 2060. It is noted that the Korean economy may fall into a quagmire of low growth as labor supply and capital investment decrease due to population decline and technological innovation also recedes.
Lee Jong-hwa, president of the Korea Economic Association and a professor at Korea University, made this statement through a thesis titled “A Declining Population Growth Model and Its Application to the Korean Economy” presented at the Joint Conference on Economics 2023 on the 2nd.
According to this paper, assuming the future population projections from the National Statistical Office and simulating the growth model, Korea’s economic growth rate was predicted until 2060. The increase was estimated at 2.3%.
In addition, in the model assuming that technological progress and human capital growth rates remain at current levels, the GDP growth rate between 2050 and 2060 is estimated at 1.5% and the per capita GDP growth rate at 2.9%.
On the other hand, in the model that assumes a gradual reduction in the physical capital investment rate, the GDP growth rate in 2050-2060 decreased to 0.2% and the GDP per capita growth rate to 1.5%.
Professor Lee explained, “This means that the Korean economy can continue to develop along a high growth path if it can maintain technological progress, improve the quality of its workforce, and maintain a high level of investment in physical capital and replace scarce labor with capital and technology .”
At the same time, he stressed, “Although it is important to expand the workforce quantitatively, we must strive to expand human capital, technological innovation, and the accumulation of physical capital.”
Hankyung.com reporter Shin Hyun-bo greaterfool@hankyung.com
