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The characteristics of the business cycle in Japan

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  • Shigeyuki Hamori
  • Shin-Ichi Kitasaka

Abstract

The present study examines the characteristics of the business cycle in the Japanese economy by using the Hodrick-Prescot filter, concluding that a change in consumption is relatively large and that labour input is ficed in Japan. Fluctuating consumption supports a permanent income hypothesis in Japan. The fixed labour input is thought to reflect the characteritics of the Japanese economy, such as a fixed employment custom like the 'lifetime employment system'. This paper presents a simple-stuctured model of the real business cycle(RBC) and examines its validity by simulation. It may be concluded that even a simple model with a time-separable utitlity function and a fixed capital-labour ratio can reproduce the movement of the Japanese economy.

Suggested Citation

  • Shigeyuki Hamori & Shin-Ichi Kitasaka, 1997. "The characteristics of the business cycle in Japan," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1105-1113.
    • Handle: RePEc:taf:applec:v:29:y:1997:i:9:p:1105-1113
    DOI: 10.1080/00036849700000001
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    References listed on IDEAS

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    1. Lucas, Robert E, Jr & Prescott, Edward C, 1971. "Investment Under Uncertainty," Econometrica, Econometric Society, vol. 39(5), pages 659-681, September.
    2. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
    3. Cooley, Thomas F & Hansen, Gary D, 1989. "The Inflation Tax in a Real Business Cycle Model," American Economic Review, American Economic Association, vol. 79(4), pages 733-748, September.
    4. McGrattan, Ellen R., 1994. "The macroeconomic effects of distortionary taxation," Journal of Monetary Economics, Elsevier, vol. 33(3), pages 573-601, June.
    5. Lars Peter Hansen & Thomas J. Sargent, 1993. "Recursive linear models of dynamic economies," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
    6. Harvey, A C & Jaeger, A, 1993. "Detrending, Stylized Facts and the Business Cycle," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(3), pages 231-247, July-Sept.
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    Cited by:

    1. Lyubomir Ivanov, 2005. "Is "The ideal filter" really Ideal: The usage of Frequency Filtering and Spurious Cycles," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 3(1), pages 79-96.
    2. Hatemi-J, Abdulnasser, 2002. "Export performance and economic growth nexus in Japan: a bootstrap approach," Japan and the World Economy, Elsevier, vol. 14(1), pages 25-33, January.
    3. Naohito Abe, 2004. "The Multi‐Sector Business Cycle Model and Aggregate Shocks: An Empirical Analysis," The Japanese Economic Review, Japanese Economic Association, vol. 55(1), pages 101-118, March.
    4. Nadenichek, Jon, 2000. "The Japan-US trade imbalance: a real business cycle perspective," Japan and the World Economy, Elsevier, vol. 12(3), pages 255-271, September.

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