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Sources and Consequences of Productivity Growth Dynamics: Is Japan Suffering from Baumol's Diseases?

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  • Hiroshi Nishi

Abstract

This study examines the sources and consequences of labour productivity growth dynamics in Japan (1970-2011) to investigate the extent to which Japanese economic performance has been affected by Baumol's growth and cost diseases. We find that although it is not as apparent in actual aggregate labour productivity dynamics, Baumol's growth disease lies behind the Japanese economy. In regard to Baumol's cost disease, the Japanese economy has undergone a change from productivity growth rate differential inflation to productivity growth rate differential deflation since the end of the 1990s. In other words, Baumol's cost disease appears atypically as deflation in the recent performance of the Japanese economy.

Suggested Citation

  • Hiroshi Nishi, 2016. "Sources and Consequences of Productivity Growth Dynamics: Is Japan Suffering from Baumol's Diseases?," Discussion papers e-16-003, Graduate School of Economics , Kyoto University.
    • Handle: RePEc:kue:epaper:e-16-003
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    More about this item

    Keywords

    Baumol diseases; Productivity growth rate differential; Japanese economy;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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