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Lessons from Japan's Secular Stagnation

Author

Listed:
  • FUKAO Kyoji
  • IKEUCHI Kenta
  • KWON Hyeog Ug
  • YoungGak KIM
  • MAKINO Tatsuji
  • TAKIZAWA Miho
Abstract
Although Japan had largely resolved the problem of non-performing loans by the early 2000s, economic growth hardly accelerated, resulting in the "two lost decades." This paper examines the underlying reasons from a long-term and structural perspective using a KLEMS-type database and micro-level data. Major issues examined include the chronic lack of domestic demand since the mid-1970s caused by the long-run decline in capital formation through the slowdown in the growth of the working age population as well as the resulting current account surplus and yen appreciation, and supply-side issues such as slow total factor productivity (TFP) growth due to Japan's low information and communications technology (ICT) investment.

Suggested Citation

  • FUKAO Kyoji & IKEUCHI Kenta & KWON Hyeog Ug & YoungGak KIM & MAKINO Tatsuji & TAKIZAWA Miho, 2015. "Lessons from Japan's Secular Stagnation," Discussion papers 15124, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:15124
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    File URL: https://www.rieti.go.jp/jp/publications/dp/15e124.pdf
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    References listed on IDEAS

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    2. Sakai, Hirotsugu, 2020. "Did financing constraints cause investment stagnation in Japan after the 1990s?," Journal of Corporate Finance, Elsevier, vol. 64(C).
    3. Grabowiecki Jerzy, 2019. "Abenomics: from the “Great Stagnation” to the “Three-Arrows Strategy”," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 55(3), pages 201-211, September.
    4. Eugene L. Goryunov & Sergey M. Drobyshevsky & Alexey L. Kudrin & Pavel V. Trunin, 2023. "Factors of global inflation in 2021–2022," Russian Journal of Economics, ARPHA Platform, vol. 9(3), pages 219-244, October.
    5. Gilles Dufrenot & Meryem Rhouzlane, 2018. "Secular Stagnation: New Challenges for the Industrialized Countries in the 21st Century," AMSE Working Papers 1818, Aix-Marseille School of Economics, France.

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