IDEAS home Printed from https://ideas.repec.org/p/boj/bojwps/wp24e04.html
   My bibliography  Save this paper

Japan's Inflation under Global Inflation Synchronization

Author

Listed:
  • Ichiro Fukunaga

    (Bank of Japan)

  • Yosuke Kido

    (International Monetary Fund)

  • Kotaro Suita

    (Bank of Japan)

Abstract

In this paper, with a brief examination of the global inflation synchronization, we analyze the effects of domestic and global factors on Japan's consumer price inflation and related variables (inflation expectations, nominal wages, etc.) since the late 1990s, when Japan fell into deflation, mainly using structural vector autoregression (SVAR) models with short- and long-run zero and sign restrictions. Historical decompositions show that various types of global shocks, including downward cost pressure due to globalization, had continuously pushed down Japan's consumer prices until the late 2010s. Subsequently, their contribution reversed, significantly pushing up prices, especially in the high-inflation phase after the pandemic. In addition, we find that service prices and nominal wages, which had not been much affected by global shocks, have also been pushed up significantly by global shocks in the recent period.

Suggested Citation

  • Ichiro Fukunaga & Yosuke Kido & Kotaro Suita, 2024. "Japan's Inflation under Global Inflation Synchronization," Bank of Japan Working Paper Series 24-E-4, Bank of Japan.
    • Handle: RePEc:boj:bojwps:wp24e04
    as

    Download full text from publisher

    File URL: https://www.boj.or.jp/en/research/wps_rev/wps_2024/data/wp24e04.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Inflation; Monetary policy; Globalization;
    All these keywords.

    JEL classification:

    • 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
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boj:bojwps:wp24e04. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bank of Japan (email available below). General contact details of provider: https://edirc.repec.org/data/bojgvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.