Lessons from Japan's Secular Stagnation

Kyoji Fukao, Kenta Ikeuchi, Hyeog Ug Kwon, YoungGak Kim (), Tatsuji Makino and Miho Takizawa

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Although Japan had largely resolved the problem of non-performing loans by the early 2000s, economic growth hardly accelerated, resulting in the "two lost decades." This paper examines the underlying reasons from a long-term and structural perspective using a KLEMS-type database and micro-level data. Major issues examined include the chronic lack of domestic demand since the mid-1970s caused by the long-run decline in capital formation through the slowdown in the growth of the working age population as well as the resulting current account surplus and yen appreciation, and supply-side issues such as slow total factor productivity (TFP) growth due to Japan's low information and communications technology (ICT) investment.

Pages: 44 pages
Date: 2015-11
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:15124

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