Japan's Domestic-Foreign Price Gap, as Viewed from the Firm's Price-Setting Behavior

Motoshige Itoh

Japanese Economy, 1992, vol. 20, issue 3, 3-36

Abstract: With a shift since 1985 toward higher yen value, the issue of the overseas-domestic price gap has come under sharp focus. The prices of goods, which should fall due to the rising value of the yen, do not in fact fall. With regard to certain brand items from overseas, exorbitant prices are charged in the domestic market in Japan. As an extreme case, goods are made in Japan that are sold more cheaply overseas than in Japan; moreover, a public upheaval was caused by these goods being imported back into Japan and sold at discount stores. When such a phenomenon attracts public attention, many debates are carried out with a frequency that has never before occurred regarding the way Japanese firms should set prices, regarding the distributional structure in Japan, and regarding the various government rules and regulations about this distribution.

Date: 1992
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DOI: 10.2753/JES1097-203X20033

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