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Accounting for Japanese Business Cycles: A Quest for Labor Wedges

Otsu, Keisuke (2011) Accounting for Japanese Business Cycles: A Quest for Labor Wedges. Monetary and Economic Studies, 29 . pp. 143-170. ISSN 1348-7787. (KAR id:44331)

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Abstract

The Japanese business cycle from 1980 to 2007 portrays a less contemporaneous correlation of labor with output than in the United States, and in addition labor tends to lead output by one quarter. A canonical real business cycle model cannot account for these facts. This paper uses the business cycle accounting method following Chari, Kehoe, and McGrattan (2007) and shows that ef?ciency and labor market distortions are important in accounting for the quarterly business cycle ?uctuation patterns in Japan. Fiscal and monetary variables such as labor income tax, money growth, and interest rates cannot fully account for the distortions in the Japanese labor market.

Item Type: Article
Uncontrolled keywords: Business cycle accounting; Japanese labor market
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: K. Otsu
Date Deposited: 12 Nov 2014 10:08 UTC
Last Modified: 29 May 2019 13:27 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/44331 (The current URI for this page, for reference purposes)
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