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Administered Prices in Japan: Institutional Comparisons with Europe and the United States

Author

Listed:
  • Kohei Shintani

    (Bank of Japan)

  • Yoshiyuki Kurachi

    (Bank of Japan)

  • Shinichi Nishioka

    (Bank of Japan)

  • Takashi Okamoto

    (Bank of Japan)

Abstract

Although the underlying trend in consumer prices has been rising steadily in recent years, administered prices in Japan have stayed more or less flat. In contrast, administered prices in Europe and the United States have consistently moved upward. Differences in the institutional systems of administered prices can be pointed out as one reason for this sharp contrast. Since the 1980s, European countries and the United States have taken measures to (i) enhance management discipline of publicly owned businesses, and (ii) create independent regulatory commissions and enhance independence from the government mainly in terms of price-setting. As a result, administered prices have been set in accordance with labor and investment costs. In the case of Japan, on the other hand, the government has been heavily and directly involved in the price-setting process, and government subsidies have been granted to many public enterprises. This mechanism may act to affect administered prices in our country.

Suggested Citation

  • Kohei Shintani & Yoshiyuki Kurachi & Shinichi Nishioka & Takashi Okamoto, 2016. "Administered Prices in Japan: Institutional Comparisons with Europe and the United States," Bank of Japan Review Series 16-E-9, Bank of Japan.
    • Handle: RePEc:boj:bojrev:rev16e09
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    File URL: http://www.boj.or.jp/en/research/wps_rev/rev_2016/data/rev16e09.pdf
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    Cited by:

    1. Bradley Jones & Joel Bowman, 2019. "China's Evolving Monetary Policy Framework in International Context," RBA Research Discussion Papers rdp2019-11, Reserve Bank of Australia.

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