Steph Haggard Co-authors Policy Brief on Currency in North Korea
"The Winter of their Discontent: Pyongyang Attacks the Market"
01/13/2010
Stephan Haggard and Marcus Noland,
Peterson Institute for International Economics
North Korea's confiscatory currency reform and the subsequent ban on the use of foreign currencies are economically misguided policies and will result in the reduction of North Korean residents' welfare. These developments come at an inopportune time with the country facing economic stagnation, spiraling prices, and a resurgence of food shortages. North Korea has made no attempt to veil its motivations: strengthening the socialist economy by directly attacking the market and the independence from state control that it represents.
Stephan Haggard and Marcus Noland posit that these policies will require a ratcheting up of already high levels of repression, and as long as the state lacks the resources and capacity to provide goods to its citizens, the effort is unlikely to significantly contribute to the stated goal of rebuilding socialism or eradicating the market.
Read the rest of the abstract here. Download a PDF of the policy brief here.
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