Experiences with Monetary Integration and Lessons for Korean Unification

by Goohoon Kwon

Korea had been under a unified government since the 7th century until it was divided in 1945 after 36 years of Japanese rule. Under the Yalta agreements following the Second World War, South Korea was governed by the U.S. military and North Korea by the Soviet army, until separate Korean governments were established in the North and the South in 1948.2 After the end of the tragic Korean war in 1953, the territorial division was maintained at the cease-fire line, with an uneasy peace prevailing since then. Meanwhile, the two states have developed entirely different and mutually independent economies, with the South prospering under a market system and the North stagnating under a centrally planned economy. Communications, trade, and movement of people between the two regions have been prohibited by both governments. The border between the two regions remains one of the most heavily fortified areas in the world.

34 pages, ebook

First published May 1, 1997