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News KDI President discussed with Nobel Prize Winner Paul Romer

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KDI President discussed with Nobel Prize Winner Paul Romer

 


KDI President Cho discussed with Nobel Prize Winner Paul Romer

 

I agree that a strong government is required to create and implement effective policies. As a president of the KDI, incentives to attract talents to the public sector must be accompanied by efforts to enhance government capabilities"



On September 12, KDI President Dongchul Cho met with Nobel Prize winner Paul Romer at the World Knowledge Forum convened by Maeil Business Newspaper. During the session, President Cho and Professor Romer discussed various topics, including the Korean economy and Korea’s strategic options in the context of the U.S.-China conflict. 

Professor Paul Romer, known for his endogenous growth theory, stated that the key to his theory was the significance of policy and that developing nations could only catch up to developed countries by the promotion of good and effective policies. In particular, he emphasized the importance of a strong government, stating, “The government should strongly restrict market participants’ behavior when NO is required through policies, and actively encourage them when YES is required through incentives or subsidies.” President Cho emphasized that it is imperative to establish a compensation system to attract talented individuals to the public sector, such as policy research institutes, to support government policies. Professor Romer elaborated on Cho's stance by stating that culture is also required in which the talents can demonstrate their abilities in the public sector for some time. To do this, setting up systems and environments that facilitate labor force mobility and flexibility is necessary. 


President Dongchul Cho discussed with Novel Prize Winner Paul Romer at the World Knowledge Forum 

President Dongchul Cho next addressed the conflict between the United States and China. In the context of the U.S.-China conflict, he inquired about the U.S. interventionist move and South Korea's strategic decision. Professor Paul Romer noted that the United States and China trade dispute is fundamentally a military competition. The United States, which feels uncomfortable with China's military expansion, has no choice but to lower the speed of China's technological development, which could pose a threat to its security. In addition, he stated, “Unconditional calls for free trade are excessive,” and “Although subsidies and incentives may appear unfair in terms of free trade, they can promote the global development of useful technologies.” President Cho also inquired about the strategic decisions South Korea, which relies on the United States and China for security and trade separately, should make. Professor Romer explained that both South Korea and the United States must maintain trade relations with countries that are not security allies, and he predicted that improved bilateral relations between China and Taiwan could contribute to the resolution of the U.S.-China conflict. 

Lastly, President Cho brought up the connection between women's labor engagement and Korea's low birth rate. He stated that Korea's birth rate is unprecedentedly low, whereas the labor participation rate of women in their 30s is close to 70%. This relatively high labor participation rate is desirable in terms of inclusive growth, but Korean women are forced to choose between childbirth and work." Professor Paul Romer explained that Korea should establish a system that allows for the coexistence of work and child care through a series of social experiments.                                                                      

Written by: Bojeon Kim, Research Associate at the President Office,  044-550-4003, kbj@kdi.re.kr

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