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Income-led Growth and Legacy of the Korean Welfare Regime

YOON HONGSIK 1

1인하대학교

Accredited

ABSTRACT

This paper examines the discussion on the income-led growth known as the core economic strategy of Moon’s administration in terms of Korean welfare regime. Although the income-led growth strategies have presented various issues, the income-led growth strategy seems to be a timely alternative discourse that emphasizes the demand side, considering supply-oriented growth strategies have caused long-term recession and deepening of inequality. It is important that the income-led growth strategy places social expenditures as an important growth engine for virtuous cycle of production and consumption. However, this paper has confirmed that simply raising wages and increasing social expenditure do not increase the aggregate demand and production. Moreover, empirical studies have shown that the inclusion of external sectors and liabilities into the analysis weakens the wage-led growth of the Korean economy. For this reason, this study concluded that the government's sophisticated policy intervention is necessary for the increase of real wages and social spending to be economic growth.

Citation status

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