Financial Instability in Japan: Debt, Confidence, and Financial Structure

Kenshiro Ninomiya and Masaaki Tokuda

A chapter in Return of Marxian Macro-Dynamics in East Asia, 2017, vol. 32, pp 39-61 from Emerald Group Publishing Limited

Abstract: The Japanese economy experienced prosperity during the bubble economy and has suffered from a prolonged recession since the bubble economy collapsed. This paper examines how the interest-bearing debt burden, structural change, and instability of confidence affect dynamic systems. Moreover, it examines these factors in the Japanese economy by applying a recursive vector autoregression analysis. This paper emphasizes the interest-bearing debt burden, the economic structure resulting from the instability of confidence, and the instability of confidence resulting from debt burden play important roles in the instability of the economy. As a result, Japan’s economy was determined to be relatively stable from 1980 to 1996, but was unstable, thereafter.

Keywords: Interest-bearing debt burden; structural change; instability of confidence; recursive VAR; Japanese economy (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rpeczz:s0161-723020170000032004

DOI: 10.1108/S0161-723020170000032004

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