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MULTIPLE EQUILIBRIA: IS BIG PUSH POSSIBLE? EVIDENCE FROM THE KAESONG INDUSTRIAL COMPLEX IN NORTH KOREA

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This paper tests whether Big Push of moving from lower level equilibrium (povertv trap) to higher one (industrialization) could occur in North Korea. The Kaesong Industrial Complex (KIC) in which some South Korean firms have just started doing business with North Korean labor. will he the main focus of this paper Using the Murphy. Shleifer. and Vishny Model, u will be argued that successful launch of the KIC will bring a spillover effect to the entire countrv. leading to industrialization and ending its dependence on nuclear weapons as a bargaining chi

Abstract

INTRODUCTION

THE MODEL

POVERTY TRAP IN NORTH KOREA

ESCAPING FROM THE TRAP: THE KAESONG INDUSTRIAL COMPLEX

SUMMARY

ENDNOTES

REFERENCES

BIOGRAPHY

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