Japanese Economic Stagnation: Causes and Global Implications

Centre for Applied Microeconomics (CAMA) Working Paper No. 20/2011

38 Pages Posted: 5 Jul 2011 Last revised: 3 May 2012

See all articles by Rod Tyers

Rod Tyers

Australian National University (ANU) - School of Economics; The University of Western Australia - Department of Economics

Date Written: July 1, 2011

Abstract

Despite Japan’s prominence in global finance and trade through the 1980s its global role has appeared to diminish with its recent stagnation and the rise of China. This paper reviews the claimed sources of Japan’s stagnation, including productivity and labour slowdowns, monetary policy in the aftermath of the Plaza Accord and the surge in China’s growth. Their independent effects are quantified using a multi-region global dynamic model. The productivity slowdown emerges strongest though its exogeneity is questioned. The resulting losses are shown to have been severe for the Japanese but mild in other regions, disguised by the rise of China.

Suggested Citation

Tyers, Rod, Japanese Economic Stagnation: Causes and Global Implications (July 1, 2011). Centre for Applied Microeconomics (CAMA) Working Paper No. 20/2011. Available at SSRN: https://ssrn.com/abstract=1876183 or http://dx.doi.org/10.2139/ssrn.1876183

Rod Tyers (Contact Author)

Australian National University (ANU) - School of Economics ( email )

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The University of Western Australia - Department of Economics ( email )

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HOME PAGE: http://www.business.uwa.edu.au/school/staff-profiles?type=profile&dn=cn%3DRodney%20Tyers%2Cou%3DEcon

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