The Structural Causes of Japan's "Two Lost Decades" (Japanese)

YoungGak Kim (), Kyoji Fukao and Tatsuji Makino

Policy Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Although by the early 2000s, Japan had largely overcome its non-performing loan problems, economic growth hardly accelerated, resulting in what now are "two lost decades." This paper examines the underlying reasons from a long-term and structural perspective. Major issues examined include the chronic lack of domestic demand since the mid-1970s, caused by a long-run decline in capital formation through a slowdown in the growth of the working age population and resulting in a current account surplus and yen appreciation, and supply-side issues such as stagnant TFP growth caused by Japan's low economic metabolism. A key finding is that whereas large firms since the mid-1990s have achieved greater increases in TFP than in the 1980s through R&D and internationalization, the TFP of small firms has stagnated.

Pages: 51 pages
Date: 2010-06
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eti:rpdpjp:10004

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