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Korea’s income-led growth model “risky”: Nobel laureate Paul Romer

Paul Romer
 

By Paul Romer (original source Pulse)

“South Korea’s income-led economy is a risky model that could backfire if companies are discouraged to add new hires, warned Paul Romer, co-winner of the 2018 Nobel Prize for Economics.

‘What we see in many countries (with such a policy) is very high levels of unemployment especially among young people who should be acquiring skills,’ said Romer, professor of economics at New York University’s Stern School of Business, in an exclusive interview with Maeil Business Newspaper.

President Moon Jae-in has raised the minimum wage under an economic platform to boost growth through higher income. But the double-digit hikes have been met with fierce backlash from the corporate sector, especially small businesses that often cannot pass on the higher costs to customers.”

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