Determinants of the 1991-93 Japanese recession: evidence from a structural model of the Japanese economy
AbstractThe objectives of this paper are to determine the extent to which various factors contributed to the current recession in Japan and to assess whether the recent behavior of the Japanese economy differs from that in previous recessions. Toward that end, we develop a small, structural macroeconometric model of the Japanese economy and estimate it using data from 1971 Q1 through 1991 Q1, the period just prior to the recent downturn. The important results can be summarized as follows. First, the severity of the current recession probably does not reflect structural economic changes. Second, the poor economic performance in 1991-1993 period was to some extent predictable, reflecting the unwinding of imbalances that developed during the preceding expansion. Finally, unpredictable movements in exchange rates, land and stock prices occurring after 1991 played an important, but not predominant, part in accentuating the downturn, while unusually stimulative fiscal and monetary policies appear to have contributed substantially to GDP during the recession.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series International Finance Discussion Papers with number 479.
Date of creation: 1994
Date of revision:
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.:
- Takeo Hoshi & Anil K. Kashyap, 1990.
"Evidence on q and investment for Japanese firms,"
Finance and Economics Discussion Series
136, Board of Governors of the Federal Reserve System (U.S.).
- Hoshi, Takeo & Kashyap, Anil K., 1990. "Evidence on q and investment for Japanese firms," Journal of the Japanese and International Economies, Elsevier, vol. 4(4), pages 371-400, December.
- Osterwald-Lenum, Michael, 1992. "A Note with Quantiles of the Asymptotic Distribution of the Maximum Likelihood Cointegration Rank Test Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 461-72, August.
- John Y. Campbell & Yasushi Hamao, 1989.
"Predictable Stock Returns in the United States and Japan: A Study of Long-Term Capital Market Integration,"
NBER Working Papers
3191, National Bureau of Economic Research, Inc.
- Campbell, John Y & Hamao, Yasushi, 1992. " Predictable Stock Returns in the United States and Japan: A Study of Long-Term Capital Market Integration," Journal of Finance, American Finance Association, vol. 47(1), pages 43-69, March.
- Hamao, Yasushi & Campbell, John, 1992. "Predictable Stock Returns in the United States and Japan: A Study of Long-Term Capital Market Integration," Scholarly Articles 3207694, Harvard University Department of Economics.
- Molana, H, 1991. "The Time Series Consumption Function: Error Correction, Random Walk and the Steady-State," Economic Journal, Royal Economic Society, vol. 101(406), pages 382-403, May.
- Allan D. Brunner & Steven B. Kamin, 1995.
"Bank lending and economic activity in Japan: did "financial factors" contribute to the recent downturn?,"
International Finance Discussion Papers
513, Board of Governors of the Federal Reserve System (U.S.).
- Brunner, Allan D & Kamin, Steven B, 1998. "Bank Lending and Economic Activity in Japan: Did 'Financial Factors' Contribute to the Recent Downturn?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 3(1), pages 73-89, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kris Vajs).
If references are entirely missing, you can add them using this form.