In the first place he is talking about the concrete earthly Judah and Jerusalem. That is half of the people of Israel in the southern part of the land. After God’s punishment, only half of God’s people will be left: the kingdom of the two tribes (see 1 Kings 12:1–33 for this) and only a remnant of them (see the books Ezra and Nehemiah). However, God is going to do great things with this remnant. It grows into God’s worldwide Christian church (Acts). As New Testament Christians, we may know to be addressed as often as Joel passes on promises of restoration (1 Peter 2:9; Ephesians 2:1–22). God’s judgment affects Old Testament Israel, but the promises extend far beyond those boundaries and have God’s New Testament people in mind until the day of Christ’s return. The promises apply to us as well.
1 “For behold, in those days and at that time, when I restore the fortunes of Judah and Jerusalem,