The Economic Integration Between North and South Korea: Lessons from German reunification and European integration

As the possibility of North Korean regime collapse has been raised and the economic gap between North and South Korea has been increasing, temporary separate operation has emerged as a way of economic integration of North and South Korea. Its main idea is that even if political integration is achieved rapidly, economic integration should proceed over time. It is generally accepted that temporary separate operation has desirable economic consequences but doubts about the feasibility are often raised because it is a scenario based on many assumptions, and politicians might prefer radical integration based on their short-term political interests. So, this paper aims to develop a temporary separate operation by providing more concrete reasons, by anticipating problems and by suggesting policy measures to enhance the feasibility. For this, the paper examines German reunification and European integration (especially Eurozone crisis) cases and compares them with the situations and features of economic and financial sectors of North and South Korea.