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Economic Research

East Asia's Hemorrhoid Problem: Assessing the Next North Korean Flare-Up

EXECUTIVE SUMMARY

The current heightened tensions between North and South Korea are unlikely to erupt into all-out war, given the inherent human and economic costs as well as the shared interest of China and South Korea in avoiding a collapse of the North’s dictatorial regime. However, a low but still real possibility exists that some combination of miscalculation, political maneuvering in the North’s power structure and outright emotion could tip the peninsula into a war. The most recent provocation by the North, a day-long shelling of a South Korean island that killed four people,[...]

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