Productivity and the Business Cycle in Japan: Evidence from Japanese Industry Data

Tsutomu Miyagawa, Yukie Sakuragawa and Miho Takizawa

Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: Constructing thirty-seven industries database, we examines whether measured productivity in Japan is procyclical and investigates the sources of that procyclicality using the production function approach employed by Hall (1990) and Basu and Fernald (1995). At the aggregate level, the measured Solow residual shows procyclicality. Large numbers of industries show constant returns to scale. No significant evidence for the presence of thick-market externalities is found. Our results also hold when we consider labor hoarding, part-time employment, and the adjustment cost of investment. The results suggest policies to revitalize the Japanese economy should concentrate on promoting productivity growth.

JEL-codes: E32 E47 (search for similar items in EconPapers)
Date: 2005-07
New Economics Papers: this item is included in nep-eff, nep-mac and nep-sea
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:hst:hstdps:d05-108

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