When I was young, the South Korean model was generally lumped in with places like Taiwan, Singapore and Hong Kong as a case of “export-led growth”. Even in the early 1970s, South Korea was still poorer than the North. There was no consensus that East Asia would do better than Latin America (or indeed that America would do better than the Soviet Union.)

I hate the term “export-led growth”, as on its face it would seem to imply that South Korea got rich by running trade surpluses. But exactly the opposite is true. During the three and a half decades of near double-digit growth (roughly 1963-97), Korea ran almost nonstop trade deficits, apart from a few years in the 1980s. This graph is from an excellent Doug Irwin paper that discusses the Korean reforms of 1964-65…

Here is more from Scott Sumner.