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Macroeconomic Interdependence of Japan and the United States: Some Simulation Results

Naoko Ishii, Warwick McKibbin () and Jeffrey Sachs

No 1637, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper we examine the macroeconomic interdependence of Japan and the U.S. using a medium-scale simulation model of the world economy. Our goal is to determine how shifts in macroeconomic policies in the U.S. or Japan affectthe other country as well as the rest of the world. In particular we examine the following three issues: (1) the likely macroeconomic ramifications for the U.S., Europe and Japan of significant budget cuts in the U.S.; (2) the macroeconomic implications of a protectionist tariff imposed by the U.S.; and (3) the scope for policy coordination among the U.S., Japan and Europe.

Date: 1985-06
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Published as Journal of Policy Modelling, Winter 1985, 533-572

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Handle: RePEc:nbr:nberwo:1637