Will Japan's Current Account Turn to Deficit?
AbstractThe Japanese current account has been in surplus since 1981, ranging from 1% to more than 4% of GDP. In this paper, we review the macroeconomic forces that have driven the surplus and describe likely changes in the first part of the next century. In coming years, structural change in Japan's economy-population aging, the globalization of production, and financial market reforms-will alter the underlying determinants of the surplus. While the net effect of these forces is difficult to predict, the most likely outcome is a gradual closing of the current account gap. We use large-model simulation analysis to evaluate the potential for specific developments to alter the current account, and we assess their likely impact on the Japanese economy.
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 University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200010.
Length: 35 pages
Date of creation: 2000
Date of revision:
Publication status: Published in Magnus Blomström, Byron Gangnes and Sumner La Croix, eds., Japan’s New Economy: Continuity and Change in the 21st Century, Oxford University Press, 2000.
Find related papers by JEL classification:
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
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.:
- Horioka, Charles Yuji, 1995.
"Is Japan's Household Saving Rate Really High?,"
Review of Income and Wealth,
International Association for Research in Income and Wealth, vol. 41(4), pages 373-97, December.
- Byron Gangnes & F. Gerard Adams, 1994.
"Japan's Persistent Trade Surplus: Policies for Adjustment,"
199404, University of Hawaii at Manoa, Department of Economics.
- Adams, F. Gerard & Gangnes, Byron, 1996. "Japan's persistent trade surplus: Policies for adjustment," Japan and the World Economy, Elsevier, vol. 8(3), pages 309-333, September.
- Kouri, Pentti J K, 1976. " The Exchange Rate and the Balance of Payments in the Short Run and in the Long Run: A Monetary Approach," Scandinavian Journal of Economics, Wiley Blackwell, vol. 78(2), pages 280-304.
- Matthew Higgins & Jeffrey G. Williamson, 1996. "Asian Demography and Foreign Capital Dependence," NBER Working Papers 5560, National Bureau of Economic Research, Inc.
- Maurice Obstfeld, 1981.
"Macroeconomic Policy, Exchange-Rate Dynamics, and Optimal Asset Accumulation,"
NBER Working Papers
0599, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice, 1981. "Macroeconomic Policy, Exchange-Rate Dynamics, and Optimal Asset Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1142-61, December.
- Paul R. Krugman, 1998. "It's Baaack: Japan's Slump and the Return of the Liquidity Trap," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 137-206.
- Takatoshi Ito & Michael Melvin, . "The Political Economy of Japan's Big Bang," Working Papers 2132866, Department of Economics, W. P. Carey School of Business, Arizona State University.
- Maddison, A., 1991.
"A Long Run Perspective on Saving,"
443, Groningen State, Institute of Economic Research-.
- Assaf Razin, 1995.
"The Dynamic-Optimizing Approach to the Current Account: Theory and Evidence,"
NBER Working Papers
4334, National Bureau of Economic Research, Inc.
- Razin, A., 1993. "The Dynamic-Optimizing Approach to the Current Account: Theory and Evidence," Papers 2-93, Tel Aviv - the Sackler Institute of Economic Studies.
- Paul R. Masson & Ralph W. Tryon, 1990.
"Macroeconomic Effects of Projected Population Aging in Industrial Countries,"
IMF Staff Papers,
Palgrave Macmillan, vol. 37(3), pages 453-485, September.
- Paul R. Masson & Ralph W. Tryon, 1990. "Macroeconomic Effects Of Projected Population Aging In Industrial Countries," IMF Working Papers 90/5, International Monetary Fund.
- Steven A. Symansky & Peter S. Heller, 1997. "Implications for Savings of Aging in the Asian "Tigers"," IMF Working Papers 97/136, International Monetary Fund.
- F. Gerard Adams & Peter A. Prazmowski, 2003. "Why are saving rates in East Asia so high? Reviving the life cycle hypothesis," Empirical Economics, Springer, vol. 28(2), pages 275-289, 04.
- Taniuchi, Mitsuru, 1997. "Recent developments in Japan's financial sector: Bad loans and financial deregulation," Journal of Asian Economics, Elsevier, vol. 8(2), pages 225-244.
- Alan J. Auerbach & Laurence J. Kotlikoff & Robert P. Hagemann & Giuseppe Nicoletti, 1989. "The Economic Dynamics of an Ageing Population: The Case of Four OECD Countries," OECD Economics Department Working Papers 62, OECD Publishing.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Why New Zealands current account deficit will begin to fall
by Matt Nolan in TVHE on 2009-01-13 02:00:41
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Web Technician).
If references are entirely missing, you can add them using this form.