Japan's productivity stagnation: Using dynamic Hsieh–Klenow decomposition

Kaoru Hosono and Miho Takizawa

Contemporary Economic Policy, 2022, vol. 40, issue 1, 218-232

Abstract: This study provides a new perspective on Japan's stagnant aggregate productivity by extending the Hsieh and Klenow (2009) framework to account for productivity growth, entry and exit, and product variety change. We measure the technical efficiency (TE) and allocative efficiency (AE) by the aggregate production possibility frontier and the distance from the frontier, respectively. We apply our approach to establishment‐ and firm‐level data sets from Japan and find that the AE among survivors declined during the banking crisis period, while the TE declined during the global financial crisis period.

Date: 2022
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https://doi.org/10.1111/coep.12547

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Persistent link: https://EconPapers.repec.org/RePEc:bla:coecpo:v:40:y:2022:i:1:p:218-232

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