North Korea’s Resurgence and China’s Rise: Implications for the Future of Northeast Asian Security

Today, Northeast Asia’s security situation is changing rapidly. North Korea is reviving and China’s power is growing at an alarming rate. While the U.S. continues to suffer diplomatically and militarily in the Middle East and from international terrorism, China’s and North Korea’s power is likely to futher increase, polarizing the Northeast Asian security structure, with South Korea, Japan (and Taiwan) all allied with the U.S. versus North Korea allied with China. The liberal democracies should pursue peace with North Korea and China to preclude the situation from aggravating, but should be ready in the longer term to meet, in diverse ways including strengthening their alliances, the challenges posed by rising powers.

Risk Incomprehension and Its Economic Consequences

Almost all theoretical and empirical studies implicitly assume that every economic agent understands the concept of risk. We exploited a unique feature of the Indonesian Family Life Survey and argued that this assumption may not apply to the developing world. A third of working men failed to understand the concept of risk, and this incomprehension did not result from a mistake or a preference for simple answers. Moreover, after applying OLS, we found that relative to risk comprehensive men, risk incomprehensive men earned 11.9 per cent less and possessed household assets worth 9.8 per cent less.