An Analysis of Changes in Regional Economic Factor on the Overlapping
Generational Regional Economic Growth
Park, Seungkyu
In order to derive changes in production, consumption, and utilities of young and old
generations, and Seoul metropolitan area (SMA) and rest of areas (ROW) by applying
physical and human capital, total factor productivity, and inflation as an indicative of
economic fluctuations, this study utilized the statistics survey of mining and
manufacturing industry from 1992 to 2017 of national statistics office.
As a result, the expansion of physical capital (scenario 1), which meant the
expansion of industry to the region did not increase the steady-state level of
consumption, production, and utility in the region. This has been shown to play a role
in increasing the wage gap. The expansion of human capital, which meant regional
labor expansion (Scenario 2), led to an increase in the steady-state level of production
in the SMA due to an increase in the steady-state level of consumption. In addition,
the youth and the elderly have increased only in the SMA, and the wage gap between
regions has also eased. The increase in total factor productivity due to the decrease in
physical and human capital (Scenario 3) was linked to the increase in the steady-state
level of production due to the increase in the steady-state level of consumption. Also,
the increase in total factor productivity increased steady-state level of utility by
decrease in steady-state level of physical and human capital. Finally, inflation changes
in economic fluctuations (scenario 4) increased both steady-state levels of utility
between generations in SMA and ROW. The steady-state level of production increased
due to the increase in the steady-state level of consumption in SMA. However, the
steady-state level of production did not increase even when the steady-state level of
consumption is increased in ROW.
Key words : Physical capital, human capital, total factor productivity, price, regional economic
growth, Overlapping generation model