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Price Dynamics in Japan (1981-2001): a Structural Analysis of Mechanisms in the Goods and Labor Markets

Author

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  • Nicolas Canry

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Julien Fouquau

    (LEO - Laboratoire d'économie d'Orleans [2008-2011] - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique, Pôle Finance Responsable - Rouen Business School - Rouen Business School)

  • Sébastien Lechevalier

    (CCJ - Chine, Corée, Japon - EHESS - École des hautes études en sciences sociales - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper, we focus on the real dimension of the price dynamics in Japan between 1980 and 2000. We use a panel industry dataset to analyze the impact of institutional and structural factors on the heterogeneous price dynamics of 10 manufacturing sectors. Although the evolution of unit labor costs seems to be the driving force, our structural analysis underlines the importance of the increasingly competitive environment, as captured by rising import penetration. Along with the decline of bargaining power of the workforce, this is at the origin of the deflationary pressures that characterized the Japanese economy during the Lost Decade.

Suggested Citation

  • Nicolas Canry & Julien Fouquau & Sébastien Lechevalier, 2010. "Price Dynamics in Japan (1981-2001): a Structural Analysis of Mechanisms in the Goods and Labor Markets," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00531584, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00531584
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    Cited by:

    1. Nicolas Canry & Julien Fouquau & Sébastien Lechevalier, 2011. "Sectoral Price Dynamics in Japan: A Threshold Approach," Economics Bulletin, AccessEcon, vol. 31(2), pages 1322-1335.

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    More about this item

    Keywords

    Deflation; Japanese Economy; Wage Bargaining; Markup; Panel Regression;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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