Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
988203 | Structural Change and Economic Dynamics | 2007 | 27 Pages |
Abstract
This paper uses a modified Harrodian model to understand both the long period of rapid Japanese growth and the recent period of stagnation. The model has multiple steady-growth solutions when the labour supply is highly elastic, and government intervention, we argue, took the Japanese economy onto a high-growth trajectory. Labour constraints began to appear around 1970, and a combination of high saving rates and slow population growth account for the stagnation of the 1990s. This combination produces a structural liquidity trap and threatens the sustainability of attempts to ensure near full employment through fiscal policy or by running a persistent trade surplus.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Takeshi Nakatani, Peter Skott,