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The Other Side of the Trade Imbalance: What Will Japan Do?


  • Ryuzo Sato
  • John A. Rizzo


With the mounting U.S. trade deficit, much attention has centered on the role of U.S. macroeconomic policy and economic structure as contributing factors. This paper contends that the economic structure and policies of Japan have also done much to contribute to the trade imbalance. Institutional features of Japan's macroeconomy and industrial structure which have promoted her large trade surplus are discussed and industrial policies evaluated. Given the nature and magnitude of the role played by Japan in causing the bilateral trade imbalance, the next question the paper addresses is how Japan might best act to alleviate this imbalance. This section of the paper examines fiscal, monetary and other policy initiatives Japan might take to reduce the trade imbalance. The evidence stresses the desirability of expanding Japan's services industries, particularly leisure-related services.

Suggested Citation

  • Ryuzo Sato & John A. Rizzo, 1986. "The Other Side of the Trade Imbalance: What Will Japan Do?," NBER Working Papers 2111, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2111
    Note: IFM

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    References listed on IDEAS

    1. Horioka, C.Y., 1991. "Saving in Japan," ISER Discussion Paper 0248, Institute of Social and Economic Research, Osaka University.
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