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

Author

Listed:
  • Kang, Duyong

    (Korea Institute for Industrial Economics and Trade)

  • Min, Seong-hwan

    (Korea Institute for Industrial Economics and Trade)

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.

Suggested Citation

  • Kang, Duyong & Min, Seong-hwan, 2021. "The Impact of the COVID-19 Pandemic on Korea’s Regional Economies," i-KIET Issues and Analysis 21/13, Korea Institute for Industrial Economics and Trade.
    • Handle: RePEc:ris:kietia:2021_013
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    More about this item

    Keywords

    COVID-19; recession; macroeconomics; disaster aid; crisis management; disaster response; Korea; Jeju; regional economics; subsidies; support; bailouts; government support; corporate welfare;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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