The Causes of Japan's "Lost Decade": The Role of Household Consumption

Charles Horioka ()

No 12142, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper, I analyze the causes of the prolonged slowdown of the Japanese economy in the 1990s and find that the stagnation of investment, especially private fixed investment, was the primary culprit. I then investigate the causes of the stagnation of household consumption during the 1990s and find that the stagnation of household disposable income, the decline in household wealth, and increased uncertainty about the future are among the contributing factors. Finally, I consider whether demand side factors or supply side factors were more important as causes of the prolonged slowdown of the Japanese economy in the 1990s and conclude that the former (especially misguided government policies) were probably more important.

JEL-codes: D12 E21 E32 O47 (search for similar items in EconPapers)
Date: 2006-04
New Economics Papers: this item is included in nep-dge and nep-mac
Note: EFG PE
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Citations: View citations in EconPapers (23)

Published as Horioka, Charles Yuji, 2006. "The causes of Japan's `lost decade': The role of household consumption," Japan and the World Economy, Elsevier, vol. 18(4), pages 378-400, December.

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Journal Article: The causes of Japan's `lost decade': The role of household consumption (2006)
Working Paper: The Causes of Japan's 'Lost Decade': The Role of Household Consumption (2006)
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