In this study, we construct a measure of human capital using micro datasets on labor composition of age, gender, education, and wage rate and analyze its role in economic growth for the Korean economy. Over the past three decades, human capital has grown steadily at about 1% per year, contrasting to a continuously declining trend of total workhours. This growth has been driven by the rise of better-educated baby boom cohorts. A growth accounting exercise shows that human capital contributes significantly to economic growth; it accounted for 0.5% points of annual GDP growth over the period. Human capital is projected to remain a major growth factor over the next two decades as the increase in educational attainment continues. Increased employment rate of elderly or female workers reduces the aggregate human capital growth while increasing the available labor. Polices to improve human capital of less-productivity workers will help to support aggregate human capital and economic growth. AbstractIn this study, we construct a measure of human capital using micro datasets on labor composition of age, gender, education, and wage rate and analyze its role in economic growth for the Korean economy. Over the past three decades, human capital has grown steadily at about 1% per year, contrasting to a continuously declining trend of total work-hours. This growth has been driven by the rise of better-educated baby boom cohorts. A growth accounting exercise shows that human capital contributes significantly to economic growth; it accounted for 0.5% points of annual GDP growth over the period. Human capital is projected to remain a major growth factor over the next two decades as the increase in educational attainment continues. Increased employment rate of elderly or female workers reduces the aggregate human capital growth while increasing the available labor. Polices to improve human capital of less-productivity workers will help to support aggregate human capital and economic growth.

This study analyzes some of the structural problems associated with the Korean financial sector, and investigates the efficiency of credit allocation by the financial system over the period from 1970 to 1996. Using data at the level of 32 industrial branches, we find no evidence that credit flows were directed sectors that were more profitable, either before or after financial reforms were initiated in the 1980s. We also find that the financial support did not contribute to improve the performance of the favored industries over time.Credit allocation, Financial reform, Korea, JEL Codes: E44, G15, O16, O53,

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Urata (2020) provides a comprehensive overview of US-Japan trade frictions in the 1960-2000 period and examines the economic impacts of the implemented measures. Drawing implications from the US-Japan trade frictions, Urata (2020) attempts to find appropriate policies to stop escalating trade conflicts between the USA and China.Urata's paper provides useful information and many insights. It provides stimulating discussions on how the Japan-US trade frictions emerged in three industriestextiles, steel, and automobilesone after another, and how Japan and the USA dealt with the frictions. The discussions about similarities and differences between the US-Japan trade friction and the USA-China trade conflicts are insightful. Urata (2020) suggests that in order to reduce its trade imbalance vis-à-vis China and deal with China's unfair trade/economic practices, the USA should adopt macroeconomic adjustment polices and coordinate with Japan and the EU. Furthermore, instead of resorting to retaliation, China should use the World Trade Organization's (WTO's) dispute settlement mechanism and opt for mega-free trade agreements such as the Regional Comprehensive Economic Partnership and China-Japan-Korea Free Trade Agreement as well as participating in the Comprehensive and Progressive Trans-Pacific Partnership.One objective of Urata's paper is to examine the economic impacts of the implemented measures such as Voluntary Export Restraints (VER) on the USA and Japanese economies. Urata (2020) claims that the US protectionist policies are counterproductive based on Hufbauer et al. 's (1986) empirical findings that trade protection on automobiles by Japanese export restraints imposed substantial welfare costs on the US economy for saving jobs. More discussion of the welfare implications of changes in US employment and income distribution caused by increasing imports from Japan as well as the implemented measures can be helpful to comprehend overall benefits and costs of trade protectionism. As argued by Batistich and Bond (2019), a rapid rise of Japanese imports might have had a distributional impact by affecting local employment and wages in certain US industries and states. Faced with the VER, Japanese automobile firms started production in the USA, which must have increased local employments in some †Correspondence: Jong-