The Japanese Trade Balance: Recent History and Future Prospects
Posted: 11 May 2000
Date Written: November 1993
The recent rise in the yen has been held out as a "solution" to the persistent Japanese trade surplus. I estimate, instead, that the sharp rise in the yen through mid-1993 will lead the trade surplus to fall from a high of 3.7 percent of GNP in late 1992 to about 2.6 percent in 1995. This relatively modest decline reflects the weak correlation between relative prices and the trade balance in the data.
JEL Classification: F32, F31
Suggested Citation: Suggested Citation