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The End of the Japanese Stagnation: an Assessment of the Policy Solutions

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  • Claudio Morana

Abstract

After more than a decade of stagnant growth, the Japanese economy is showing signs of full recovery, with deflation also having come to an end. Since the mid 1990s both supply side and demand side policy solutions to the Japanese stagnation have been suggested. By means of a Factor Vector Autoregressive Model, the paper aims to assess whether the real depreciation of the yen and the quantitative easying implemented by the Bank of Japan have contributed to the recovery of the Japanese economy and to halt deflationary dynamics. The results of the paper point to the effectiveness of these latter policies, as well as to the role exercised by domestic productivity improvements and the expansion of world economic activity.

Suggested Citation

  • Claudio Morana, 2006. "The End of the Japanese Stagnation: an Assessment of the Policy Solutions," ICER Working Papers 27-2006, ICER - International Centre for Economic Research.
    • Handle: RePEc:icr:wpicer:27-2006
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    File URL: http://www.bemservizi.unito.it/repec/icr/wp2006/ICERwp27-06.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    factor vector autoregression; large scale macroeconometric model; Japan; monetary policy.;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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