A Preliminary Estimation of an Econometric Model for North Korea

This article lays the groundwork for the creation of a macroeconometric model of North Korea. The author devises eight structural equations to be used in the model construction that show the North Korean economy to be a completely recursive system. He considers five series of statistics in arriving at an estimate of the North Korean gross national product; establishes a precipitation-based weather variable for annual agricultural production; and develops a series of consumption figures based on estimates from the People's Republic of China. The structural equations suggest that a fully developed econometric model would show a strong stability with recursive specification.