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Real Wages and the Japanese Economy

Author

Listed:
  • Hiroshi Yoshikawa

    (Associate Professor. Institute of Social and Economic Research, Osaka University)

  • Yoshiyuki Takeuchi

    (Graduate student, University of Tokyo)

Abstract

This paper analyzes the determinants of real wages in Japan by using panel data. One finding is that the dispersion of sales across industries tends to suppress wage increases in Japan. In addition, a comparison of Japan's prewar and postwar economies presents some evidence suggesting that the flexibility of wages does not necessarily enhance the stability of the real economy. Furthermore, estimations of investment functions reveal that an increase in real wages tends to raise investment. This evidence suggests that for the most part the Japanese economy in the 1970s and 1980s was quantity-constrained in the Keynesian sense.

Suggested Citation

  • Hiroshi Yoshikawa & Yoshiyuki Takeuchi, 1989. "Real Wages and the Japanese Economy," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 7(1), pages 1-40, April.
    • Handle: RePEc:ime:imemes:v:7:y:1989:i:1:p:1-40
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    File URL: http://www.imes.boj.or.jp/research/papers/english/me7-1-1.pdf
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    Cited by:

    1. Maria Soledad Martinez Peria, 2002. "The Impact of Banking Crises on Money Demand and Price Stability," IMF Staff Papers, Palgrave Macmillan, vol. 49(3), pages 1-1.
    2. Edward B. Montgomery, 1994. "Patterns in Regional Labor Market Adjustment: The United States versus Japan," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 95-118, National Bureau of Economic Research, Inc.
    3. Edward B. Montgomery, 1993. "Pattern in Regional Labor Market Adjustment: The United States vs. Japan," NBER Working Papers 4414, National Bureau of Economic Research, Inc.
    4. Kimura, Takeshi & Ueda, Kazuo, 2001. "Downward Nominal Wage Rigidity in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 15(1), pages 50-67, March.

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