Kyung-Min Nam

We examine the potential impacts of North Korea’s upgraded highway infrastructure on the Korean economies, taking a dynamic computable general equilibrium approach. The results show that the proposed North Korean highway upgrading project, costing US$58 billion, can have significant pro-growth effects on North Korea’s economy, promoting annual growth by ≤ 14.3% over a 30-year period. Investment-led stimulus accounts for a dominant share of the total growth effects, while the contributions of trade openness and highway network effects are either marginal or even negative. In contrast, the project has negligible effects on South Korea’s economy, promoting annual growth by only 0.1%. In particular, if South Korea is financially responsible for the project, the investment cost required substantially exceeds the benefit the South can enjoy, resulting in a negative net present value of the project from its perspective (a loss of up to US$15 billion). Such one-sided benefits lower the feasibility of the project, raising the need for additional incentives, such as reduced institutional barriers to inter-Korean trade.

This paper examines the impacts of housing market policies in Korea by developing a dynamic computable general equilibrium model integrating regional housing markets and multiregional mobility. We compare simulation outcomes of demand- and/or supply-side approaches in housing market interventions and address how these various policy instruments affect housing prices, demand, and household welfare. Policy simulation results suggest that supply-based interventions would be more effective than housing tax policies for cooling down overheated housing markets without decreasing consumer welfare. Tax-based demand-side approaches result in a 1.8–2.2% housing price drop and a 1.1–1.2% welfare decline annually between 2021 and 2024. In the supply-side policy, investing in housing construction leads to 3.4–4.1% lower housing prices and 1.5–1.8% enhanced welfare.

We apply a percolation method to South Korea’s road networks and identify major urban clusters. The results show that Korea has developed a highly mono-centric spatial structure, in which the Seoul Metropolitan Area expands to northern Chungnam, far beyond the limits conventionally assumed. A percolation threshold of 1080 m is critical in delineating Korea’s functional regions, and the results at this threshold show great similarity to flow-based maps. Similar model outputs support the percolation approach as an alternative to conventional flow-based methods. The similarity is higher for larger clusters, where the supply of road infrastructure better meets demand thanks to size-biased public resource allocation. Also, the similarity between model outputs tends to increase with a time lag, since road network configurations take time to catch up with the demand revealed in traffic flows. These findings speak for the need for increased connectivity in Korea’s smaller cities.

We examine the effects of urban rail transit on on-road carbon emissions in 90 Chinese cities, taking a structural equation modeling approach. Urban rail transit theoretically helps mitigate overall transport-sector emissions by absorbing part of the vehicular traffic demand or by generating traffic-diversion effects. However, its net contribution is obscure, given potential traffic-creation effects, since improved rail access can also incentivize new developments and thus induce additional on-road traffic. In contrast to many existing studies that neglect rail transit’s traffic-creation effects, we analyze these opposing effects within a single framework, where primary rail-associated emission channels are explicitly modeled. Our central results show that urban rail density is negatively associated with on-road carbon emissions with a net elasticity of −0.0175, speaking for the dominance of the traffic-diversion effects in China’s context. However, mixed evidence exists on the effects of increased urban rail density on vehicle-kilometers traveled and vehicle ownership, with the two opposing effects being relatively balanced. These findings suggest that transport-sector mitigation needs coordination between urban rail development and planning regulations.