Paul Römer’s 90 Model and South Korean Economic Growth: An Econometric Study

Abstract

The South Korean economy has experienced rapid growth since the end of the Korean War. Industrial production became very important in its economy. The service industry has developed such as telecommunications, government services, trade, and transportation through the reliance on human capital. Many economic models and theories have interpreted economic growth through human capital and knowledge, such as Paul Römer’s 90 model. This study aims to apply this model of economic growth in the case of South Korea during the period 1979-2018 using an econometric study. Our econometric study is based on the production function of the Paul Römer’90 model. We found that the labor force has a positive impact on the GDP and this effect increases in the long run by 5 doubles during the study period. For patents, their impact has increased also by 7.46 doubles. While the effect of capital accumulation decreased in the long run. We conclude that the human factor and patents have played a large role in the long run South Korean economic growth as stated in the Römer model.