Articles
Neo-Protectionism, the Future of the Global Economy, and Challenges for the Korean Economy
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AuthorSeonghoon Cho (Yonsei University)
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Year2026
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VolumeVol.19
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NumberNo.1
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This study historically and theoretically demonstrates that neo-protectionism and supply chain fragmentation, triggered by the post-Global Financial Crisis U.S.-China hegemonic rivalry, are a structural “negative aggregate supply shock” permanently lowering Korea's TFP and potential growth rate, and presents tasks for the Korean economy's leap forward. The Korean economy has already experienced prolonged TFP growth slowdowns and potential growth declines, and such external environmental changes are highly likely to structurally make Korea's productivity leap more difficult. Government-led growth strategies and economic institutions, effective during the past high-growth period, now act as constraints blocking autonomous private innovation in the current advanced economic system. For fundamental structural improvement and continuous productivity leaps, this study proposes, instead of short-term policies: 1) fully reorganizing the regulatory paradigm into a “negative” system based on principle permission, and 2) redefining the government's role from direct market intervention to a “ facilitator” nurturing human capital and basic innovation infrastructure.
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