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The "Miracle on the Han River" associated with convergence theory.
Ha Nguyen
Division:
Business and Computing
Department:
Department of Business
Mentor:
Lee Gordon
Mentor's e-mail:
lgordon@occ.cccd.edu
Author's e-mail:
hnguyen2143@student.cccd.edu
Abstract:

South Korea witnessed a rapid economic recovery widely known as “The Miracle on the Han River” post-Korean war. In economics, there is a theory explaining this upward trend for South Korea’s economy called the convergence theory speculating that developing economies will grow more rapidly than developed economies, leading to a convergence in terms of per capita income. In order to prove the existence of this theory, the nominal GDP growth of the richest country at that time - the United States was compared with South Korea’s by statistical methods illustrated by charts, visual graphics. Based on the data collected, South Korea’s annual GDP growth percentage during the 1960s was constantly around 10% while the respective number for the States was only 4%. This study will also provide insights into the reasons behind the rapid economic growth of South Korea. Promoting the industrial sector and establishing family-owned large conglomerates are believed to be the driving force. There has been an industrial revolution that resulted in the formation of many industrial conglomerates such as Samsung, LG, and Hyundai, and they are now the leading businesses regionally and even globally. In conclusion, the research has proved the validity of the convergence theory in economics and suggests the futuristic potentials in the economic growth of underdeveloped or developing countries in the future. Lastly, based on the study case of South Korea, public policies possess great effectiveness in recovering economy in the difficult times which might be a solution for many countries trying to resume economic activities post-COVID 19 outspread.

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