Sectoral Price Dynamics in Japan: A Threshold Approach

Economics Bulletin, 2011, Vol. 31 no. 2, pp. 1322-1335

14 Pages Posted: 30 Apr 2018

See all articles by Nicolas Canry

Nicolas Canry

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES)

Julien Fouquau

ESCP Business School

Sebastien Lechevalier

Ecole des Hautes Etudes en Sciences Sociales (EHESS)

Date Written: May 12, 2011

Abstract

This paper focuses on the real – as opposed to the monetary – side of the economy to explain price dynamics in Japan between 1981 and 2001. We use a panel industry data set to examine the impact of institutional and structural factors on the heterogeneous price dynamics in 10 manufacturing sectors. Although the evolution of unit labor costs may seem to be the driving force of these price dynamics, our analysis underlines the importance of the increasingly competitive environment, as captured by rising import penetration. Along with the decline of bargaining power of the workforce, this is a key factor underlying the deflationary pressures that characterized Japanese manufacturing industries in the 1990s.

Suggested Citation

Canry, Nicolas and Fouquau, Julien and Lechevalier, Sebastien, Sectoral Price Dynamics in Japan: A Threshold Approach (May 12, 2011). Economics Bulletin, 2011, Vol. 31 no. 2, pp. 1322-1335, Available at SSRN: https://ssrn.com/abstract=2492137 or http://dx.doi.org/10.2139/ssrn.2492137

Nicolas Canry (Contact Author)

Université Paris I Panthéon-Sorbonne - Centre d'Economie de la Sorbonne (CES) ( email )

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Julien Fouquau

ESCP Business School ( email )

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Sebastien Lechevalier

Ecole des Hautes Etudes en Sciences Sociales (EHESS) ( email )

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HOME PAGE: http://https://sebastienlechevalier.wordpress.com/

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