Japan's Fiscal Crisis and Implications for Imports from Korea

Journal of the Korean Economy, Vol. 8, No. 2 (Fall 2007), 261-272

University of Alberta School of Business Research Paper No. 2013-320

Posted: 27 May 2013

See all articles by Dick Beason

Dick Beason

University of Alberta - Department of Marketing, Business Economics & Law

R. Todd Smith

University of Alberta

Date Written: August 1, 2006

Abstract

Korean exports to Japan are highly correlated to Japanese GDP growth. Given Japan’s large fiscal deficit and debt, there is concern that future government austerity measures may cause a collapse in Korean exports to that country. After summarizing the magnitude of Japan’s fiscal woes, we investigate whether austerity measures are likely to cause a collapse in such exports. We find no statistically significant relationship between Japanese fiscal policy and Korean exports to Japan, as well as no evidence that past fiscal policy in Japan has had significant impact on Japanese GDP growth. We conclude that future Japanese austerity measures are unlikely to cause a collapse in Korean exports to Japan.

Keywords: austerity, economic growth, exports, neutrality

JEL Classification: F1, E6

Suggested Citation

Beason, Dick and Smith, Richard Todd, Japan's Fiscal Crisis and Implications for Imports from Korea (August 1, 2006). Journal of the Korean Economy, Vol. 8, No. 2 (Fall 2007), 261-272 ; University of Alberta School of Business Research Paper No. 2013-320. Available at SSRN: https://ssrn.com/abstract=2269988

Dick Beason (Contact Author)

University of Alberta - Department of Marketing, Business Economics & Law ( email )

Edmonton, Alberta T6G 2R6
Canada

Richard Todd Smith

University of Alberta ( email )

8-14 Tory Building
Edmonton, Alberta T6G 2H4
Canada
403-492-7898 (Phone)
403-492-3300 (Fax)

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