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Lessons from Japan's Secular Stagnation

Listed author(s):
  • FUKAO Kyoji
  • IKEUCHI Kenta
  • KWON Hyeog Ug
  • YoungGak KIM
  • MAKINO Tatsuji
  • TAKIZAWA Miho

Although Japan had largely resolved the problem of non-performing loans by the early 2000s, economic growth hardly accelerated, resulting in the "two lost decades." This paper examines the underlying reasons from a long-term and structural perspective using a KLEMS-type database and micro-level data. Major issues examined include the chronic lack of domestic demand since the mid-1970s caused by the long-run decline in capital formation through the slowdown in the growth of the working age population as well as the resulting current account surplus and yen appreciation, and supply-side issues such as slow total factor productivity (TFP) growth due to Japan's low information and communications technology (ICT) investment.

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File URL: http://www.rieti.go.jp/jp/publications/dp/15e124.pdf
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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 15124.

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Length: 44 pages
Date of creation: Nov 2015
Handle: RePEc:eti:dpaper:15124
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  1. Fumio Hayashi & Edward C. Prescott, 2004. "The 1990s in Japan: a lost decade," Chapters,in: The Economics of an Ageing Population, chapter 2 Edward Elgar Publishing.
  2. Paul R. Krugman, 1998. "It's Baaack: Japan's Slump and the Return of the Liquidity Trap," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 137-206.
  3. Kyoji Fukao, 2013. "Explaining Japan's Unproductive Two Decades," Asian Economic Policy Review, Japan Center for Economic Research, vol. 8(2), pages 193-213, December.
  4. Bayoumi, Tamim, 2001. "The morning after: explaining the slowdown in Japanese growth in the 1990s," Journal of International Economics, Elsevier, vol. 53(2), pages 241-259, April.
  5. Fumio Hayashi & Edward C. Prescott, 2002. "The 1990s in Japan: A Lost Decade," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 206-235, January.
  6. Ando, Albert, 2002. "Missing Household Saving and Valuation of Corporations: Inquiry into Japanese National Accounts I," Journal of the Japanese and International Economies, Elsevier, vol. 16(2), pages 147-176, June.
  7. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, January.
  8. Jorgenson, Dale W. & Kuroda, Masahiro & Nishimizu, Mieko, 1987. "Japan-U.S. industry-level productivity comparisons, 1960-1979," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 1-30, March.
  9. Kyoji Fukao & Tsutomu Miyagawa & Kentaro Mukai & Yukio Shinoda & Konomi Tonogi, 2009. "Intangible Investment In Japan: Measurement And Contribution To Economic Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 717-736, September.
  10. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
  11. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The case of the missing productivity growth: or, does information technology explain why productivity accelerated in the United States but not the United Kingdom?," Working Paper Series WP-03-08, Federal Reserve Bank of Chicago.
  12. "Kawaguchi, Daiji" & "Kwon, HyeogUg" & "Shimizutani, Satoshi" & "Fukao, Kyoji" & "Makino, Tatsuji" & "Yokoyama, Izumi" & "Kambayashi, Ryo" & "Kim, YoungGak", 2007. "Are Wage‐tenure Profiles Steeper than Productivity‐tenure Profiles?―Evidence from Japanese Establishment Data from the Census of Manufacturers and the Basic Survey Wage Structure―," Economic Review, Hitotsubashi University, vol. 58(1), pages 61-90, January.
  13. Kyoji Fukao & Hyeog Ug Kwon, 2006. "Why Did Japan'S Tfp Growth Slow Down In The Lost Decade? An Empirical Analysis Based On Firm-Level Data Of Manufacturing Firms," The Japanese Economic Review, Japanese Economic Association, vol. 57(2), pages 195-228.
  14. FUKAO Kyoji & IKEUCHI Kenta & YoungGak KIM & KWON Hyeog Ug, 2015. "Why Was Japan Left Behind in the ICT Revolution?," Discussion papers 15043, Research Institute of Economy, Trade and Industry (RIETI).
  15. James M. Poterba, 1987. "Tax Policy and Corporate Saving," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(2), pages 455-516.
  16. Charles Yuji Horioka, 2008. "The Flow of Household Funds in Japan," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 4(1), pages 37-52, December.
  17. Gary R. Saxonhouse & Robert M Stern, 2002. "Japan's Lost Decade: Origins, Consequences, and Prospects For Recovery," Working Papers 484, Research Seminar in International Economics, University of Michigan.
  18. Dale W. JORGENSON & NOMURA Koji & Jon D. SAMUELS, 2015. "A Half Century of Trans-Pacific Competition: Price level indices and productivity gaps for Japanese and U.S. industries, 1955-2012," Discussion papers 15054, Research Institute of Economy, Trade and Industry (RIETI).
  19. B.K. Atrostic & Kazuyuki Motohashi & Sang Nguyen, 2008. "Computer Network Use and Firms' Productivity Performance: The United States vs. Japan," Working Papers 08-30, Center for Economic Studies, U.S. Census Bureau.
  20. KWON Hyeog Ug & KIM Younggak, 2010. "Ownership Structure and TFP: Evidence from Japanese firms (Japanese)," Discussion Papers (Japanese) 10050, Research Institute of Economy, Trade and Industry (RIETI).
  21. "Kim, YoungGak" & "Fukao, Kyoji" & "Makino, Tatsuji", 2010. "The Structural Causes of Japan's “Two Lost Decades”," Economic Review, Hitotsubashi University, vol. 61(3), pages 237-260, July.
  22. Ogawa, Kazuo, 2011. "Balance sheet deterioration and credit allocations: Japanese evidence from the short-term economic survey of enterprises," Japan and the World Economy, Elsevier, vol. 23(2), pages 86-96, March.
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