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Capital Accumulation, Vintage and Productivity: The Japanese Experience

Author

Listed:
  • Taiji Hagiwara

    (Graduate School of Economics, Kobe University)

  • Yoichi Matsubayashi

    (Graduate School of Economics, Kobe University)

Abstract

We empirically examine the relationship between capital accumulation and vintage as well as the productivity of industries in Japan from 1980 to 2007. Based on the empirical analyses, we confirmed that vintage exerted a significant influence on the productivity during the period of economic expansion, particularly during the economic upturn that started in 2000, where strong vintage effects were observed in all industries. The rejuvenation of capital equipment during this period clearly resulted from a strong productivity effect. In contrast, during the bubble period of the late 1980s, vintage exerted no observable effects on productivity despite significant increases in investment. This finding shows that increase of capital stock during this period was not necessarily Productive and was likely to produce a merely temporary boom. From this view, we reconfirm that the relationship between vintage and productivity changed in subtle ways in response to the phases of business cycles.

Suggested Citation

  • Taiji Hagiwara & Yoichi Matsubayashi, 2014. "Capital Accumulation, Vintage and Productivity: The Japanese Experience," Discussion Papers 1418, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:1418
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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2014/1418.pdf
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    References listed on IDEAS

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    Cited by:

    1. Badri G. Narayanan & Sangeeta Khorana, 2017. "Mega-regional trade Agreements: Costly distractions for developing countries?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-18, December.
    2. Narayanan, Badri & Khorana, Sangeeta, 2016. "Mega-­Regional Trade Agreements: Implications or Public Health in Developing Countries," Conference papers 332710, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    Keywords

    Vintage; productivity; Business cycle;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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