NAME: BARBADILLO, CHERYL Q.

COURSE & YR: BSMA – 4

SUBJECT: ECON 225

CASE STUDY 3
Schools of Thought in Context: South Korea and Argentina

SOUTH KOREA

LAND AREA: 100,210 km2

TOTAL POPULATION: 51,365,294
RELIGION: 45 percent are Protestant, 35 percent Buddhist, 18 percent Roman Catholic, and 2
percent “other.”
POLITICAL SYSTEM: presidential representative democratic republic
GNP: 430.327 USD in June 2022
GDP: 1.631 trillion USD (2020)
POVERTY RATE: In 2020, the relative poverty rate in South Korea stood at around 15.3 %
INCOME PER CAPITA: 43,480 PPP (2020)
GNI PER CAPITA: 2.251 trillion PPP dollars (2020)
LITERACY LEVEL: 97.97%

ARGENTINA

LAND AREA: 2,780,400 km2

TOTAL POPULATION: 46,098,357
RELIGION: 62.9 % of the population is Catholic; 15.3 % Protestant, including evangelical
groups; 18.9 % no religion, which includes agnostics; 1.4 % Jehovah Witnesses and The Church
of Jesus Christ of Latter-day Saints
POLITICAL SYSTEM: Republic, representative democracy, federal republic, constitutional
republic, presidential system
GNP: 481.548 USD in Dec 2021
GDP: 383.1 billion USD (2020)
POVERTY RATE: Argentina poverty rate for 2020 was 18.20%
INCOME PER CAPITA: 20,210 PPP (2020)
GNI PER CAPITA: 917.2 billion PPP dollars (2020)
LITERACY LEVEL: 99.00%

I. FACTS OF THE CASE STUDY

South Korea certainly meets the maturity criterion of being integrated with world economy
through new types of export and imports. South Korea confirms some linear- stage views, but in a
limited way. South Korea today is in stage of a Drive to Maturity and on its way toward mastering
the range of currently available technology and appears to be entering in the age of high mass
consumption. So, this shows the development and growth of South Korea is a well fit with
Rostow’s Model.
South Korea also confirms some patterns of development structural change models,
rapidly, increasing agriculture productivity, shifts of labor from agriculture to industry the steady
growth of education and skills and capital stocks and the demographic transition from high to low
fertility. These changes happened when South Koreas per capita income grew. South Korea carried
out a thorough going land reforms so agriculture was neglected; but otherwise, its rapid growth
through rapid expansion of percentage of the labor force in industry has broadly confirmed the
Lewis model of development South Korea fits well in these two models but at the same time it
poses some serious contradictions with dependence revolution and neoclassical counterrevolution
theories.

II. PROBLEM OF THE STUDY

1. How to stabilize the economy of Argentina?

III. SOLUTIONS TO THE PROBLEM

• To stabilize the economy in Argentina eliminating the fiscal deficit can help in stabilizing
the economy. The nonfinancial public sector improved its performance, and it created a
primary surplus which is large enough to meet interest payments on both internal and
foreign debt. The country's solvency was restored as a result of the general improvement
 in public finances. Reformation in the tax system is needed, between 1989 and 1992, VAT
collections climbed by 4.5 percentage points of GDP due to improvements in tax
administration and an increase in the VAT rate. Over the same time span, social security
contributions increased by 1.5 percentage points of GDP. These massive increases in
income allowed the government to not only eliminate the deficit, but also to restructure the
tax system by eliminating disinter-mediation-causing taxes on exports and checking
accounts, as well as other minor taxes that were complicated and difficult to administer.

• To stabilize the economy in Argentina Structural Reforms is needed. In practice, this entails
three reforms, one for each of the system's three components, which should be treated
separately: the contributory component, which should be made consistent with underlying
demographics, the universal component which should be treated as any other social transfer
within the Treasury's budget, and the special regimes, which should be fully funded or
phased out. A new fiscal agreement, based on a progressive income tax schedule –
eliminating exclusions, establishing a new high-income rate, and cutting the approximately
170 current national and subnational taxes – is also needed to prevent tax disputes and
reduce national and subnational debts.

IV. RECOMMENDATIONS
I highly recommend solution 2, the reason for this is that solution no.2 shows holistic
approach compared to solution 1. Solution 2 talks about the three components which should be
treated separately. In that way, monetary is not mishandled and avoid debts which can leads to
inflation.

V. CONCLUSION
In conclusion, involvement of had a greater impact on how a country runs. The
government's involvement in South Korea caused the country to quickly recover. A productive
nation would result from the government's positive treatment of its constituents. In Argentina, the
government is the reason for stagnation country’s progress.
Each method for analyzing progress has its own set of pros and downsides. Successful
development necessitates a precise and careful balancing of market pricing and promotion, as well
as prudent and equitable government intervention. Traditional neoclassical economic theory must
be adapted to the social, institutional, and structural realities of developing countries.