The economy of Silla was primarily based on agriculture. The reservoirs that existed at this time indicate that flooded rice paddies had been developed.
Intensive rice agriculture that featured transplanting of seedlings was not developed until sometime later, but rice sown by broadcasting was cultivated (Nelson 1982, 531).
One of the reasons the Kyongju area came to dominate first the Silla territory of the southeast of the peninsula and later the whole peninsula was its external trade.
With ready access to the sea, the Kyongju aristocracy was able to sail around the south coast of Korea and up the west coast to the port of Lolang, where they could trade local products for iron implements and weapons from China, giving Silla an advantage over its neighbors, who at the time had only bronze.
By the fifth century and after, Silla merchants traded directly with China and Japan. Items from West Asia appeared in the tombs of Silla royalty at Kyongju, indicating that Silla participated in the silk route trade.
In addition to traders and farmers, there were numerous artisans. There must have been a large sector of the population involved in the making of ceramics. Numerous examples of pottery and records of roofs covered in tiles survive from the Silla period. Artisans worked in wood, leather, gold, iron, and bronze.
The large number of Buddhist temples—there were 203 temples in Kyongju alone—must have played an important role in the economy. They required laborers for their upkeep, farmers to tend the temple lands, and artisans to create buildings, paintings, sculptures, and bronze bells.
The central government must have imposed a high tax payment on conquered peoples. No records of the tax rate survive, but it was sufficient to maintain an army, navy, and luxurious lifestyle for the aristocrats.
Taxes were collected in three forms: rice and other crops; specialty items such as animal skins, medicinal herbs, various kinds of ore, and other unique products from each area; and manufactured items including woven cloth and other handicrafts.