WHY DID JAPAN'S ECONOMIC GROWTH RATE DECREASE IN THE 1970S? (in Japanese)

Even though Japan's economic growth rate drastically decreased in the 1970s, only few analyses behind this decrease have been attempted. This paper tries to explain why the decline of the growth rate occurred, using a VAR model. First, we had doubts about the decline being caused by oil shocks, the shrinking of the productivity gap between Japan and the advanced countries, and the decline in population growth rate. Second, we constructed a VAR model based on a neo-classical growth model. The model shows that free and efficient inputs of labor and capital, along with technological progress, were vigorous. Third, we estimated the model by using variables such as private capital, public capital, labor, money supply, internal migration, and productivity gap between Japan and the United States, and oil prices. The results of estimation strongly suggest that the decline was not explained by the shrink in productivity gap and oil prices, but by the changes within the Japanese economy to respond to those variables. For example, parameter of the productivity gap was 0.056 in 1955-75, but it became negative in 1975-2003. Japan's economy lost the ability to "catch up" to a more efficient economy after 1975. This is the reason why the Japanese economy declined in the 1970s. Our analysis, however, cannot explain why the Japanese economy lost this ability.