The 1990s in Japan: A lost decade

Fumio Hayashi; Edward C. Prescott

doi:10.1006/redy.2001.0149

The 1990s in Japan: A lost decade

Fumio Hayashi, Edward C. Prescott

Research output: Contribution to journal › Article › peer-review

411 Scopus citations

Abstract

This paper examines the Japanese economy in the 1990s, a decade of economic stagnation. We find that the problem is not a breakdown of the financial system, as corporations large and small were able to find financing for investments. There is no evidence of profitable investment opportunities not being exploited due to lack of access to capital markets. The problem then and today is a low productivity growth rate. Growth theory, treating TFP as exogenous, accounts well for the Japanese lost decade of growth. We think that research effort should be focused on what policy changes will allow productivity to again grow rapidly. Journal of Economic Literature Classification Numbers: E2, E13, O4, O5.

Original language	English (US)
Pages (from-to)	206-235
Number of pages	30
Journal	Review of Economic Dynamics
Volume	5
Issue number	1
DOIs	https://doi.org/10.1006/redy.2001.0149
State	Published - 2002
Externally published	Yes

Keywords

Growth model
Japan
TFP
Workweek

ASJC Scopus subject areas

Economics and Econometrics

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10.1006/redy.2001.0149

Cite this

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title = "The 1990s in Japan: A lost decade",

abstract = "This paper examines the Japanese economy in the 1990s, a decade of economic stagnation. We find that the problem is not a breakdown of the financial system, as corporations large and small were able to find financing for investments. There is no evidence of profitable investment opportunities not being exploited due to lack of access to capital markets. The problem then and today is a low productivity growth rate. Growth theory, treating TFP as exogenous, accounts well for the Japanese lost decade of growth. We think that research effort should be focused on what policy changes will allow productivity to again grow rapidly. Journal of Economic Literature Classification Numbers: E2, E13, O4, O5.",

keywords = "Growth model, Japan, TFP, Workweek",

author = "Fumio Hayashi and Prescott, {Edward C.}",

note = "Funding Information: 1We thank Tim Kehoe, Nobu Kiyotaki, Ellen McGrattan, and Lee Ohanian for helpful comments, and Sami Alpanda, Pedro Amaral, Igor Livshits, and Tatsuyoshi Okimoto for excellent research assistance and the Cabinet Office of the Japanese government, the United States National Science Foundation, and the College of Liberal Arts of the University of Minnesota for financial support. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System.",

year = "2002",

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PY - 2002

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N2 - This paper examines the Japanese economy in the 1990s, a decade of economic stagnation. We find that the problem is not a breakdown of the financial system, as corporations large and small were able to find financing for investments. There is no evidence of profitable investment opportunities not being exploited due to lack of access to capital markets. The problem then and today is a low productivity growth rate. Growth theory, treating TFP as exogenous, accounts well for the Japanese lost decade of growth. We think that research effort should be focused on what policy changes will allow productivity to again grow rapidly. Journal of Economic Literature Classification Numbers: E2, E13, O4, O5.

AB - This paper examines the Japanese economy in the 1990s, a decade of economic stagnation. We find that the problem is not a breakdown of the financial system, as corporations large and small were able to find financing for investments. There is no evidence of profitable investment opportunities not being exploited due to lack of access to capital markets. The problem then and today is a low productivity growth rate. Growth theory, treating TFP as exogenous, accounts well for the Japanese lost decade of growth. We think that research effort should be focused on what policy changes will allow productivity to again grow rapidly. Journal of Economic Literature Classification Numbers: E2, E13, O4, O5.

KW - Growth model

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KW - TFP

KW - Workweek

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The 1990s in Japan: A lost decade

Abstract

Keywords

ASJC Scopus subject areas

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