Japan’s Trade Balance in the Context of the Balance-of-Payments Stages Theorem

Ali M. El-Agraa
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Ali M. El-Agraa: University of Leeds

Chapter 3 in Japan’s Trade Frictions, 1988, pp 62-81 from Palgrave Macmillan

Abstract: Abstract The first scenario for explaining Japan’s trade frictions with the EC and the USA is the most straightforward since it depends entirely on the information provided in Chapter 2. The brief look at the Japanese economy, especially its trade balance, tends to suggest that Japan has had many years of balance of trade surplus while the EC and the USA have had many years of trade deficits. Hence, it would seem inevitable to conclude that this has been the main cause of the trade frictions between Japan and these countries, particularly given the information about the inherent difficulties associated with a Japanese market which is supposedly relatively ‘impenetrable’ by foreign firms. However, such a scenario would be too simplistic as an explanation of Japan’s trade frictions: according to the ‘balance of payments stages’ theorem, Japan is undergoing the same process experienced by the UK from 1800 to 1880 and by the USA from 1915 to 1960.

Keywords: Current Account; Trade Balance; Trade Deficit; Current Account Balance; Trade Surplus (search for similar items in EconPapers)
Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-10059-0_3

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DOI: 10.1007/978-1-349-10059-0_3

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