The Impact of the COVID-19 Pandemic on Korea’s Regional Economies

12 Pages Posted: 17 Jan 2023 Last revised: 14 Apr 2023

See all articles by Duyong Kang

Duyong Kang

Korea Institute for Industrial Economics and Trade

Seong-hwan Min

Korea Institute for Industrial Economics and Trade

Date Written: June 29, 2021

Abstract

This paper estimates the impact of the COVID-19 pandemic-induced recession on Korea's regional economies. It finds that the recession has hit the island province of Jeju and the cities of Incheon and Ulsan the hardest, in that order. For Jeju in particular, it was estimated that the province’s real gross regional domestic product (GRDP) declined by 9% compared to the pre-pandemic trend, a figure 2.5 times greater than the estimated impact of the pandemic on nationwide GDP growth.

The paper describes implications for policy carried by the analysis. It makes two key suggestions: the government could either work to strengthen support for the industries and subsectors in the deepest slumps, or provide direct support for economies in the hardest-hit regions.

Keywords: COVID-19, recession, macroeconomics, disaster aid, crisis management, disaster response, Korea, Jeju, regional economics, subsidies, support, bailouts, government support, corporate welfare

JEL Classification: H84, H12, H25, H32, H71, R10, R11, R50, R58, E32

Suggested Citation

Kang, Duyong and Min, Seong-hwan, The Impact of the COVID-19 Pandemic on Korea’s Regional Economies (June 29, 2021). Korea Institute for Industrial Economics and Trade Research Paper No. 21/iKIET/114, i-KIET Issues & Analysis No. 114, Available at SSRN: https://ssrn.com/abstract=4323500 or http://dx.doi.org/10.2139/ssrn.4323500

Duyong Kang (Contact Author)

Korea Institute for Industrial Economics and Trade ( email )

Sejong National Research Complex
370 Sicheong Dae-ro C-dong 8-12F
Sejong City 30147
Korea, Republic of (South Korea)

Seong-hwan Min

Korea Institute for Industrial Economics and Trade ( email )

Sejong National Research Complex
370 Sicheong Dae-ro C-dong 8-12F
Sejong City 30147
Korea, Republic of (South Korea)

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