A More Realistic Endogenous Time Preference Model and the Slump in Japan

Taiji Harashima

Macroeconomics from EconWPA

Abstract: This paper presents a more realistic endogenous time preference model, incorporating the property that impatience decreases as consumption increases. The model overcomes a serious drawback of the existing model, which needs the assumption of increasing impatience. The new model is applied to the Japanese economy, which has been mired in a persistent slump since the early 1990s, and the hypothesis that a time preference rate shift is the main cause of the slump is explored. The estimated time preference rate clearly shows that an upward time preference shift of about 2% occurred in Japan.

Keywords: Time preference; Uncertainty; Japanese economy; Business fluctuations (search for similar items in EconPapers)
JEL-codes: D90 O53 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic and nep-sea
Date: Written 2004-02-06
Note: Type of Document - pdf; prepared on Windows Me; pages: 35 ; figures: 5 figures and a table included
View list of references

Downloads: (external link)
http://129.3.20.41/eps/mac/papers/0402/0402015.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this paper

More papers in Macroeconomics from EconWPA
Series data maintained by EconWPA ().