Suppose the North and South Korean leaders agree to unite the two countries in 2023, and they plan to restructure the new Korean economy under market capitalism.
One key problem that arises when merging market and command economies into a market system is how to handle the transition to market prices.
In general, command economies provide lower wages and few goods but tend to maintain lower prices for food, energy, and other essential goods.
Would residents of the former North Korean economy be better off to experience a faster transition to higher prices and wages with a better selection of goods, or would it be easier for these people to experience a slower transition to the market economy? Please be specific in details in your answer.
What would be the pros and cons of a fast transition to higher prices and wages?
