The Korea Local Administration Review

The purpose of this paper is to analyze the economic impacts of the regional development of Chungcheong area on national economic growth and regional disparities of incomes and population. The multi-regional Computable General Equilibrium model for the four region-wide areas is developed to identify spatial effects of allocation of investments and government expenditures for 15 periods. This paper finds that transferring government consumption expenditures from Seoul Metropolitan areas to Chungcheong areas contributes to economic growth in the short run, but failing in sustainable national growth in the long run. On the other hand, increases in investment activities of private sectors in Chungcheong areas could lead to positive growth in the long run. It implies that the local government needs to have more emphasis on inducing private investments from the Capital Metropolitan area with regional economic measures.