ESSAYS ON ECONOMIC INTEGRATION, MIGRATION, AND SECONDARY MARKETS

Thesis (Ph.D.), School of Economic Sciences, Washington State UniversityThis dissertation discusses three topics. Chapter 1, Korean Economic Integration: Prospects and Pitfalls, analyzes the potential economic impacts if North and South Korea were to economically integrate. The main benefit of integration for North Korea is the catch-up growth learning it experiences from technology spillovers from the South. To match West Germany's experience after its 1990 reunification, we allow an integration to harm South Korea's per-capita GDP growth. In an optimistic scenario North Korea makes large improvements in macroeconomic variables including wages, and per-capita GDPs with little slow down in South Korea. However, in the most pessimistic scenario, South Korean per-capita GDP falls about 19% below its no integration scenario. Chapter 2, North Korean Internal Migration, analyzes the determinants of interprovincial migration within North Korea. The analysis stands out from similar analyses of other countries due to North Korea's strict restrictions on labor mobility. Despite these restrictions, it is found that economic variables play a statistically significant role in accounting for variations in interprovincial migration rates. All else equal, there are more migrations towards provinces with strong industry growth and provinces that contain a special economic zone. Chapter 3, Supporting Secondary Markets, develops a model of durable goods markets with two firms competing in a vertically differentiated duopoly. The model examines when a firm would find it profit maximizing to support the secondary market by offering a product buyback program that eliminates the transaction costs faced by consumers selling used goods. Firms will offer buyback programs if the increases in new product prices firms are able to charge outweigh the decreases in new product quantities demanded. In general, the firms are more likely to offer a buyback program whenever a third party reseller is also already offering a buyback program. The firms' decisions to offer a buyback program will impact the prices and quantities sold in the initial and secondary markets.School of Economic Sciences, Washington State Universit