Unemployment in Japan: a look at the lost decade
Author
Agnese, Pablo
Sala, Hector
Publication date
2008ISSN
1326-8481
Abstract
The ‘lost decade’ in Japan was a period of steep surge in unemployment. It started in 1991 with the unemployment rate at 2.1%, and ended in 2002 when it reached a historical maximum of 5.5%. To assess the main causes of this rise we take a macroeconomic perspective and estimate a reduced-form unemployment model. This model, containing a rich set of variables, yields an interesting picture. The fall of private investment played the main role, while private consumption and the boost in government spending partially offset this recessive effect. In turn, the initial rise in participation rates and the East Asian crisis after 1997 added new burdens to the labor market. We conclude that a crucial issue in the medium-run is to avoid the consequences of the prolonged decline in investment in terms of reduced productivity growth and a weaker international trade performance.
Document Type
Article
Document version
Published version
Language
English
Subject (CDU)
33 - Economics. Economic science
Keywords
Atur
Models de forma reduïda
Inversió
Política econòmica
Crisi de l'est asiàtic
Desempleo
Modelos de forma reducida
Inversión
Política económica
Crisis del este de Asia
Unemployment
Reduced-form models
Investment
Economic policy
East Asian crisis
Pages
19
Publisher
Institute for Research into International Competitiveness; Curtin Business School
Collection
12;1
Is part of
Asia Pacific Journal of Economics and Business
Citation
Agnese, Pablo; Sala, Hector. Unemployment in Japan: a look at the lost decade. Asia Pacific Journal of Economics and Business, 2008, 12(1), p. 1-24. Disponible en: <https://mpra.ub.uni-muenchen.de/14332/>. Fecha de acceso: 27 feb. 2024.
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Rights
© Asia Pacific Journal of Economics and Business