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The causes of the long stagnation in Japan

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  • Tatsuyoshi Miyakoshi
  • Yoshihiko Tsukuda

Abstract

The paper investigates whether the Japanese bank lending causes the long stagnation in the 1990s and if so whether this effect on the growth is more persistent than in the 1980s. Applying a VAR model for the annual prefecture panel data, the former can be verified by Granger causality test and the latter by impulse response function. There exists only one way causality from the loan to the GDP in the slump periods, while two way causalities exist in the 1980s. The shock in the loan equation is less persistent than the shock in GDP in the 1980s, but the persistence is reversed in the 1990s.

Suggested Citation

  • Tatsuyoshi Miyakoshi & Yoshihiko Tsukuda, 2004. "The causes of the long stagnation in Japan," Applied Financial Economics, Taylor & Francis Journals, vol. 14(2), pages 113-120.
    • Handle: RePEc:taf:apfiec:v:14:y:2004:i:2:p:113-120
    DOI: 10.1080/0960310042000176380
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    References listed on IDEAS

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    1. Fumio Hayashi & Edward C. Prescott, 2004. "The 1990s in Japan: a lost decade," Chapters, in: Paolo Onofri (ed.), The Economics of an Ageing Population, chapter 2, Edward Elgar Publishing.
    2. Motonishi, Taizo & Yoshikawa, Hiroshi, 1999. "Causes of the Long Stagnation of Japan during the 1990s: Financial or Real?," Journal of the Japanese and International Economies, Elsevier, vol. 13(3), pages 181-200, September.
    3. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    4. Fumio Hayashi & Edward C. Prescott, 2002. "The 1990s in Japan: A Lost Decade," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(1), pages 206-235, January.
    5. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
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    Cited by:

    1. Hartwig, Jochen, 2010. "Is health capital formation good for long-term economic growth? - Panel Granger-causality evidence for OECD countries," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 314-325, March.
    2. Tatsuyoshi Miyakoshi, 2010. "A Welfare Cost Of The Lost Decade In Japan," Australian Economic Papers, Wiley Blackwell, vol. 49(1), pages 28-43, March.
    3. Hartwig, Jochen, 2012. "Testing the growth effects of structural change," Structural Change and Economic Dynamics, Elsevier, vol. 23(1), pages 11-24.
    4. Jochen Hartwig, 2009. "A panel Granger-causality test of endogenous vs. exogenous growth," KOF Working papers 09-231, KOF Swiss Economic Institute, ETH Zurich.
    5. Miyakoshi, Tatsuyoshi & Takahashi, Toyoharu & Shimada, Junji & Tsukuda, Yoshihiko, 2014. "The dynamic contagion of the global financial crisis into Japanese markets," Japan and the World Economy, Elsevier, vol. 31(C), pages 47-53.
    6. Jochen Hartwig, 2008. "Has Health Capital Formation Cured 'Baumol's Disease'? - Panel Granger Causality Evidence for OECD Countries," KOF Working papers 08-206, KOF Swiss Economic Institute, ETH Zurich.
    7. Hirofumi Fukuyama & William L. Weber, 2017. "Measuring bank performance with a dynamic network Luenberger indicator," Annals of Operations Research, Springer, vol. 250(1), pages 85-104, March.
    8. Tatsuyoshi Miyakoshi & Yoshihiko Tsukuda, 2007. "Assessments of the program for financial revival of the Japanese banks," Applied Financial Economics, Taylor & Francis Journals, vol. 17(11), pages 901-912.
    9. Hartwig, Jochen, 2014. "Testing the Uzawa–Lucas model with OECD data," Research in Economics, Elsevier, vol. 68(2), pages 144-156.

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