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Monetary and international factors behind Japan's lost decade

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  • Hamada, Koichi
  • Okada, Yasushi

Abstract

Most studies on Japan's "lost decade" have been broadly focused on its real and domestic aspects, such as total factory productivity (TPF), growth decline, non-performing loans, and governance. This paper shows that monetary and international factors played as an equally important role as those non-monetary and domestic factors in generating the prolonged Japan's stagnation. The Plaza Accord in 1985 managed to alter the major exchange rates mainly by verbal promises combined with coordinated monetary policies, and triggered the trend for the stronger real exchange rate of the yen. The subsequent monetary exchange rate policy kept the real exchanged greatly overvalued. Japanese industries endured a heavy burden during this period. J. Japanese Int. Economies 23 (2) (2009) 200-219.

Suggested Citation

  • Hamada, Koichi & Okada, Yasushi, 2009. "Monetary and international factors behind Japan's lost decade," Journal of the Japanese and International Economies, Elsevier, vol. 23(2), pages 200-219, June.
  • Handle: RePEc:eee:jjieco:v:23:y:2009:i:2:p:200-219
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    Cited by:

    1. Malmaeus, J. Mikael & Alfredsson, Eva C., 2017. "Potential Consequences on the Economy of Low or No Growth - Short and Long Term Perspectives," Ecological Economics, Elsevier, vol. 134(C), pages 57-64.
    2. Dekle, Robert & Hamada, Koichi, 2015. "Japanese monetary policy and international spillovers," Journal of International Money and Finance, Elsevier, vol. 52(C), pages 175-199.
    3. Atsuo Utaka, 2014. "Consumer Confidence and the Japanese Economy -Comparison of Pre- and Post-Bubble Period-," Economics Bulletin, AccessEcon, vol. 34(2), pages 1165-1173.
    4. Tyers, Rod, 2014. "Looking inward for transformative growth," China Economic Review, Elsevier, vol. 29(C), pages 166-184.
    5. Fujii, Hidemichi & Managi, Shunsuke, 2016. "Research and development strategy for environmental technology in Japan: A comparative study of the private and public sectors," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 293-302.
    6. Andrea Fracasso, 2015. "Economic Rebalancing and Growth: the Japanese experience and China’s prospects," DEM Discussion Papers 2015/07, Department of Economics and Management.
    7. Xinhua He & Duo Qin & Yimeng Liu, 2012. "Exchange rate misalignments: a comparison of China today against recent historical experiences of Japan, Germany, Singapore and Taiwan," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 10(3), pages 247-266, May.
    8. Rod Tyers, 2012. "Looking Inward for Transformative Growth in China," CAMA Working Papers 2012-15, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    9. W Max Corden & Sisira Jayasuriya, 2016. "The Japanese macroeconomic mystery," Departmental Working Papers 2016-03, The Australian National University, Arndt-Corden Department of Economics.

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