Abstract

This paper analyzes the North Korean sanctions problem from a quantitative approach and makes objective conclusions based solely upon empirical research. Design, Methodology, Approach— In this article, the author uses hierarchical clustering to examine the balance of trade between North Korea and its trading partners as well as these partners' partners. Findings— North Korea is isolated economically. This is a result of both sanctions and North Korea's own isolationist policies. China is by far North Korea's largest trading partner for both imports and exports; however, economic coercion to meter China's trade will impact its other trade partners. First among these other trade partners is the United States. Congo is the route for trilateral trade with North Korea. Trilateral trade may circumvent sanctions even by signatories to such economic regimes. South Korea is safely nestled economically with the United States, China, and germany protecting its economy from sanctions on North Korea. Practical Implications— North Korea's own isolationist policies and long history of sanctions make expanding sanctions upon them by the Western World irrelevant except perhaps in terms of domestic political gains. Originality, Value— This is a non-traditional application of hierarchical clustering to macroeconomics which overcomes the analytical challenges of scale between large and small countries and asymmetric relationships.

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