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It's Not Structural Change, but Domestic Demand: Productivity Growth in Japan

  • Akira Kohsaka

    (Professor, School of International Studies, Kwansei Gakuin University)

  • Jun-ichi Shinkai

    (Specially Appointed Researcher, Osaka School of International Public Policy, Osaka University)

This paper examines the role of structural change in productivity growth in Japan, focusing on her recent "lost decades", with reference to the United States. Japan is now known to have a sharp slowdown in productivity growth in the 1990s, when we find a slowdown in intra-industry productivity growth is the main cause. We also find that the contribution of inter-industry reallocation of employment is almost zero in the 1990s and even significantly negative in the 2000s. Interestingly, the same holds true in the US, too. We will argue that structural change or the lack of it may not be responsible for the lost decades in Japan, and that these contrasting outcomes between Japan and the US come from a common factor.

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Paper provided by Osaka School of International Public Policy, Osaka University in its series OSIPP Discussion Paper with number 13E005.

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Length: 16 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:osp:wpaper:13e005
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  1. McMillan, Margaret & Rodrik, Dani, 2012. "Globalization, structural change, and productivity growth:," IFPRI discussion papers 1160, International Food Policy Research Institute (IFPRI).
  2. Kyoji Fukao & Tsutomu Miyagawa & Hak Kil Pyo & Keun Hee Rhee, 2012. "Estimates of Total Factor Productivity, the Contribution of ICT, and Resource Reallocation Effects in Japan and Korea," Chapters, in: Industrial Productivity in Europe, chapter 9 Edward Elgar.
  3. Robert J. Gordon, 2000. "Does the "New Economy" Measure up to the Great Inventions of the Past?," NBER Working Papers 7833, National Bureau of Economic Research, Inc.
  4. 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.
  5. Kyoji Fukao & Hyeog Ug Kwon, 2004. "Why Did Japan's TFP Growth Slow Down in the Lost Decade?: An Empirical Analysis Based on Firm-Level Data of Manufacturing Firms," Hi-Stat Discussion Paper Series d04-50, Institute of Economic Research, Hitotsubashi University.
  6. Benjamin N. Dennis & Talan Iscan, 2007. "Accounting for Structural Change: Evidence from Two Centuries of U.S. Data," Department of Economics at Dalhousie University working papers archive account7, Dalhousie, Department of Economics.
  7. Dale Jorgenson & Koji Nomura, 2007. "The Industry Origins of the US-Japan Productivity Gap," Economic Systems Research, Taylor & Francis Journals, vol. 19(3), pages 315-341.
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