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Will Japan's Current Account Turn to Deficit?

Author

Listed:
  • F. Gerard Adams
  • Byron Gangnes

    () (Department of Economics, University of Hawaii at Manoa)

Abstract

The Japanese current account has been in surplus since 1981, ranging from 1% to more than 4% of GDP. In this paper, we review the macroeconomic forces that have driven the surplus and describe likely changes in the first part of the next century. In coming years, structural change in Japan's economy-population aging, the globalization of production, and financial market reforms-will alter the underlying determinants of the surplus. While the net effect of these forces is difficult to predict, the most likely outcome is a gradual closing of the current account gap. We use large-model simulation analysis to evaluate the potential for specific developments to alter the current account, and we assess their likely impact on the Japanese economy.

Suggested Citation

  • F. Gerard Adams & Byron Gangnes, 2000. "Will Japan's Current Account Turn to Deficit?," Working Papers 200010, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:200010
    as

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    File URL: http://www.economics.hawaii.edu/research/workingpapers/010.pdf
    File Function: First version, 2000
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    References listed on IDEAS

    as
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    6. Takatoshi Ito & Michael Melvin, "undated". "The Political Economy of Japan's Big Bang," Working Papers 2132866, Department of Economics, W. P. Carey School of Business, Arizona State University.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why New Zealand’s current account deficit will begin to fall
      by Matt Nolan in TVHE on 2009-01-13 08:00:41

    More about this item

    Keywords

    Japanese current account; forecast;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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