The present study examines the characteristics of the business cycle in the Japanese economy by using the Hodrick--Prescot filter, concluding that a change in consumption is relatively large and that labour input is ficed in Japan. Fluctuating consumption supports a permanent income hypothesis in Japan. The fixed labour input is thought to reflect the characteritics of the Japanese economy, such as a fixed employment custom like the 'lifetime employment system’. This paper presents a simple-stuctured model of the real business cycle(RBC) and examines its validity by simulation. It may be concluded that even a simple model with a time-separable utitlity function and a fixed capital--labour ratio can reproduce the movement of the Japanese economy.
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Article provided by Taylor and Francis Journals in its journal Applied Economics.
Volume (Year): 29 (1997) Issue (Month): 9 (September) Pages: 1105-1113 Download reference. The following formats are available: HTML
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Lucas, Robert E, Jr & Prescott, Edward C, 1971.
"Investment Under Uncertainty,"
Econometrica,
Econometric Society, vol. 39(5), pages 659-81, September.
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