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.
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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
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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
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