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Japanese growth and stagnation: a Keynesian perspective
Economics Department Working Paper Series
Working Paper Number
2006-04
Publication Date
2006
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.
Disciplines
DOI
https://doi.org/10.7275/1069101
Citation Information
Takeshi Nakatani and Peter Skott. "Japanese growth and stagnation: a Keynesian perspective" (2006) Available at: http://works.bepress.com/peter_skott/3/