The causes of Japan's `lost decade': The role of household consumption
AbstractIn this paper, I analyze the causes of the prolonged slowdown of the Japanese economy in the 1990s and find that the stagnation of investment, especially private fixed investment, was the primary culprit. I then investigate the causes of the stagnation of household consumption during the 1990s and find that the stagnation of household disposable income, the decline in household wealth, and increased uncertainty about the future are among the contributing factors. Finally, I consider whether demand side factors or supply side factors were more important as causes of the prolonged slowdown of the Japanese economy in the 1990s and conclude that the former (especially misguided government policies) were probably more important.
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Bibliographic InfoArticle provided by Elsevier in its journal Japan and the World Economy.
Volume (Year): 18 (2006)
Issue (Month): 4 (December)
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Web page: http://www.elsevier.com/locate/inca/505557
Other versions of this item:
- Charles Yuji Horioka, 2006. "The Causes of Japan's 'Lost Decade': The Role of Household Consumption," ISER Discussion Paper 0661, Institute of Social and Economic Research, Osaka University.
- Charles Yuji Horioka, 2006. "The Causes of Japan's "Lost Decade": The Role of Household Consumption," NBER Working Papers 12142, National Bureau of Economic Research, Inc.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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- Kohara, Miki & Horioka, Charles Yuji, 2006.
"Do borrowing constraints matter? An analysis of why the permanent income hypothesis does not apply in Japan,"
Japan and the World Economy,
Elsevier, vol. 18(4), pages 358-377, December.
- Miki Kohara & Charles Yuji Horioka, 2006. "Do Borrowing Constraints Matter? An Analysis of Why the Permanent Income Hypothesis Does Not Apply in Japan," ISER Discussion Paper 0663, Institute of Social and Economic Research, Osaka University.
- Miki Kohara & Charles Yuji Horioka, 2006. "Do Borrowing Constraints Matter? An Analysis of Why the Permanent Income Hypothesis Does Not Apply in Japan," NBER Working Papers 12330, National Bureau of Economic Research, Inc.
- Rod Tyers & Ying Zhang, 2011.
"Japan’s Economic Recovery: Insights from Multi-Region Dynamics,"
CAMA Working Papers
2011-18, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
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- Kurita, Takamitsu, 2010. "Co-breaking, cointegration, and weak exogeneity: Modelling aggregate consumption in Japan," Economic Modelling, Elsevier, vol. 27(2), pages 574-584, March.
- Muellbauer, John & Murata, Keiko, 2009. "Consumption, Land Prices and the Monetary Transmission Mechanism in Japan," CEPR Discussion Papers 7269, C.E.P.R. Discussion Papers.
- Somphoom Sawaengkun Author_Email: email@example.com, 2011. "Household Consumption And Old-Age Population: Empirical Study For Thailand And Japan," Annual Summit on Business and Entrepreneurial Studies (ASBES 2011) Proceeding 2011-015-136, Conference Master Resources.
- Alan J. Auerbach & William G. Gale, 2009. "Activist Fiscal Policy to Stabilize Economic Activity," NBER Working Papers 15407, National Bureau of Economic Research, Inc.
- Masahiko Shibamoto & Ryuzo Miyao, 2008. "Understanding Output and Price Dynamics in Japan: Why Have Japan's Price Movements Been Relatively Stable Since the 1990s?," Discussion Paper Series 219, Research Institute for Economics & Business Administration, Kobe University.
- Charles Yuji Horioka, 2012. "Recent Trends in Consumption in Japan and the Other Group of Seven (G7) Countries," ISER Discussion Paper 0861, Institute of Social and Economic Research, Osaka University.
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