Japanese growth and stagnation: a Keynesian perspective
This paper uses a modified Harrodian model to understand both the long period of rapid Japanese growth and the recent period of stagnation. The model has multiple steady-growth solutions when the labour supply is highly elastic, and government intervention, we argue, took the Japanese economy onto a high-growth trajectory. Labour constraints began to ap- pear around 1970, and a combination of high saving rates and slow popu- lation growth account for the stagnation of the 1990s. This combination produces a structural liquidity trap and threatens the sustainability of at- tempts to ensure near full employment through fiscal policy or by running a persistent trade surplus. JEL Categories: E12, E63, O53
|Date of creation:||Feb 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Thompson Hall, Amherst, MA 01003|
Web page: http://www.umass.edu/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Amitava Krishna Dutt & Peter Skott, 1996. "Keynesian Theory and the Aggregate-Supply/Aggregate-Demand Framework: A Defense," Eastern Economic Journal, Eastern Economic Association, vol. 22(3), pages 313-331, Summer.
- 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.
- Skott, Peter, 1981. "On the 'Kaldorian' Saving Function," Kyklos, Wiley Blackwell, vol. 34(4), pages 563-81.
- Taylor, Lance, 1985. "A Stagnationist Model of Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 9(4), pages 383-403, December.
- Ekkehart Schlicht, 2006.
"Public Debt As Private Wealth: Some Equilibrium Considerations,"
Wiley Blackwell, vol. 57(4), pages 494-520, November.
- Skott,Peter, 2008.
"Conflict and Effective Demand in Economic Growth,"
Cambridge University Press, number 9780521066310, November.
- Peter Skott, 2004.
"Fairness as a source of hysteresis in employment and relative wages,"
UMASS Amherst Economics Working Papers
2004-04, University of Massachusetts Amherst, Department of Economics.
- Skott, Peter, 2005. "Fairness as a source of hysteresis in employment and relative wages," Journal of Economic Behavior & Organization, Elsevier, vol. 57(3), pages 305-331, July.
- Skott, Peter, . "Fairness as a source of hysteresis in employment and relative wages," Economics Working Papers 2003-6, Department of Economics and Business Economics, Aarhus University.
- 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.
- Fumio Hayashi & Edward C. Prescott, 2000. "The 1990s in Japan: a lost decade," Working Papers 607, Federal Reserve Bank of Minneapolis.
- Fumio Hayashi & Edward C. Prescott, 2002. "Data Appendix to The 1990s in Japan: A Lost Decade," Technical Appendices hayashi02, Review of Economic Dynamics.
- James M. Poterba, 1987.
"Tax Policy and Corporate Saving,"
470, Massachusetts Institute of Technology (MIT), Department of Economics.
- Skott, Peter, 1989. "Effective Demand, Class Struggle and Cyclical Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 231-47, February.
- Peter Skott & Peter Flaschel, 2004.
"Steindlian Models of Growth and Stagnation,"
UMASS Amherst Economics Working Papers
2004-11, University of Massachusetts Amherst, Department of Economics.
- Cowling, Keith & Tomlinson, Philip R, 2000. "The Japanese Crisis--A Case of Strategic Failure?," Economic Journal, Royal Economic Society, vol. 110(464), pages F358-81, June.
- Skott, Peter, 1997. "Stagflationary Consequences of Prudent Monetary Policy in a Unionized Economy," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 609-22, October.
- Morana, Claudio, 2004. "The Japanese stagnation: an assessment of the productivity slowdown hypothesis," Japan and the World Economy, Elsevier, vol. 16(2), pages 193-211, April.
- Anonymous, 1978. "Introduction [Commerce et Technologie]," Canadian Public Policy, University of Toronto Press, vol. 4(1), pages 2-3, Winter.
- Anonymous, 1978. "Introduction [Trade and Technology]," Canadian Public Policy, University of Toronto Press, vol. 4(1), pages 1-2, Winter.
- Peter Skott, . "Demand Policy in the Long Run," Economics Working Papers 2000-17, Department of Economics and Business Economics, Aarhus University.
- Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
When requesting a correction, please mention this item's handle: RePEc:ums:papers:2006-04. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniele Girardi)
If references are entirely missing, you can add them using this form.