Income redistribution in Korea reduces household saving and shifts demand dynamics.
The study looked at how redistributing income in Korea affects household saving and demands for labor, capital, and imports. They found that making income more equal can reduce saving somewhat. When income is redistributed, it can increase overall demand and output, affecting the need for labor, capital, and imports. The study suggests that balancing fairness and efficiency in saving is not as difficult as expected, but in the labor and capital markets, fairness and efficiency can work together.