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A Neoclassical Analysis of the Postwar Japanese Economy


  • Keisuke Otsu

    (Institute for Monetary and Economic Studies, Bank of Japan (E-mail:


Two key features of the postwar Japanese economy are the delay of catch up during the 50s followed by rapid economic growth during the 60s and early 70s and the consistent decline in labor supply during the rapid growth period. A standard neoclassical growth model can quantitatively account for the Japanese postwar growth patterns of capital, output, consumption and investment taking the destruction of capital stock during the war and postwar TFP growth as given. The decline in labor can be explained by strong income effects caused by subsistence consumption during the rapidly growing period.

Suggested Citation

  • Keisuke Otsu, 2007. "A Neoclassical Analysis of the Postwar Japanese Economy," IMES Discussion Paper Series 07-E-01, Institute for Monetary and Economic Studies, Bank of Japan.
  • Handle: RePEc:ime:imedps:07-e-01

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    References listed on IDEAS

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    Cited by:

    1. Ippei Fujiwara & Keisuke Otsu & Masashi Saito, 2008. "The Global Impact of Chinese Growth," IMES Discussion Paper Series 08-E-22, Institute for Monetary and Economic Studies, Bank of Japan.
    2. Niizeki Takeshi, 2014. "Capacity utilization and the effects of energy price increases in Japan," The B.E. Journal of Macroeconomics, De Gruyter, vol. 14(1), pages 1-26, January.
    3. Daisuke Ikeda & Yasuko Morita, 2016. "The Effects of Barriers to Technology Adoption on Japanese Prewar and Postwar Economic Growth," IMES Discussion Paper Series 16-E-01, Institute for Monetary and Economic Studies, Bank of Japan.
    4. Takeshi Niizeki, 2012. "Energy-Saving Technological Change in Japan," Global COE Hi-Stat Discussion Paper Series gd11-218, Institute of Economic Research, Hitotsubashi University.
    5. Shuhei Aoki & Julen Esteban-Pretel & Tetsuji Okazaki & Yasuyuki Sawada, 2009. "The Role of the Government in Facilitating TFP Growth during Japan's Rapid Growth Era," CIRJE F-Series CIRJE-F-622, CIRJE, Faculty of Economics, University of Tokyo.
    6. Ko, Jun-Hyung, 2011. "Has the Government Lowered the Hours Worked? Evidence from Japan," MPRA Paper 30058, University Library of Munich, Germany.
    7. Aoki, Shuhei, 2011. "A Model of Technology Transfer in Japan's Rapid Economic Growth Period," IIR Working Paper 11-05, Institute of Innovation Research, Hitotsubashi University.
    8. Keisuke Otsu & Katsuyuki Shibayama, 2016. "Population Aging and Potential Growth in Asia," Asian Development Review, MIT Press, vol. 33(2), pages 56-73, September.

    More about this item


    E13; O40;

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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