Introduction to Japanese Economy

Fall 2023

Syllabus

2024/1/17

Ryoichi Imai

International Student Center, Kyushu University

My JTW Course Page

JTW Homepage

Contents

1.     Course Outline

2.     Organization, Attendance, and Other Requirements

3.     Pre-requisites

4.     Assessment Details

5.     Schedule and Readings

Course Outline

The course is designed to provide some introductory knowledge of Japanese economy. Students will learn the essence of historical and institutional background of Japanese Economy. In this course, we will focus on the structural issue of Japanese economy as a background of the 10 year depression since the crush of the bubble economy in 1990.

Key words of this course: Corporate organization and governance, financial system and corporate groups, competition and business strategies, exchange rate regimes and international capital flows, productivity gap across industries, aging society, education and meritocracy, economic development and class stratification, and others.

Organization, Attendance, and Other Requirements

Lecture notes are to be uploaded on the course website.

The class starts with a series of lecture given by the instructor. Later the students present some selected reading materials. Each course attendant is required to do at least ONE oral presentation of the articles assigned by the instructor. The presenter must make a set of PowerPoint Slides. There is one midterm or final examination, which might be open-book or take home one.

Pre-requisite

None. Any knowledge on macroeconomics or microeconomics will be useful.

Assessment Details

You can get two credits by satisfying the following three requirements.

1.     Class Attendance and Discussion 20%

According to the government guideline, no students are allowed to take the course final examination, if they do not show up in more than 1/3 of the class meetings. The government has set up a more rigorous grading standard on credits.

2.     Presentation 40%

3.     Final Examination 40%

If you need to acquire three credits in accordance with the credit transfer policy of your home university, you can get three credits by making a second presentation in different topics in addition to the requirements as above.

Schedule and Readings (subject to Change)

PART I: Lecture

Lecture 1 (10/3)  Introduction
Concise History of Japan Overview - Wikipedia

Religion in Japan Buddhism in Japan (Wikipedia)

Shinto Ise Shrine, Usa Shrine, Izumo Shrine, Itsukushima Shrine

Ancient Buddhism Houryuji, Todaiji

Amidism Byodo-in, Chion-in, West Honganji, East Honganji

Zen Tenryuji, Bairinji, Eiheiji,

Lotus Sutra Minobusan Kuonji

Concise Geography of Japan

    Prefectures in Japan

Industry Distribution in Japan
Industries in Hokkaido 2013
Industries in Tohoku 2019
Industries in Kanto
Industries in Chubu 2019
Industries in Kinki 2020
Industries in Chugoku
Industries in Shikoku
Profile of Kyushu 2020
Industries in Okinawa

Lecture 2 (10/10) E01. Introduction

We will review the development of Japanese economy during the last two decades focusing on the four crisis episodes:

Crash of the Bubble Economy 1990

Asia Currency Crisis 1997-98

Crash of the IT bubble 2000.

The 'Subprime' Crisis 2007-

Krugman, Paul (1994), The Myth of Asia's Miracle, Foreign Affairs.

Productivity Slowdown and Structural Reforms

Hayashi, Fumio and Edward C. Prescott [2002], The 1990s in Japan: A Lost Decade, Review of Economic Dynamics, 206-235.

Prescott, Edward C. [2002], Prosperity and Depression, American Economic Review, 92(2), 1-15. Downloadable in the campus.

Caballero, Hoshi, and Kashyap (2008), Zombie Lending and Depressed Restructuring in Japan, American Economic Review, 98(5), 1943–1977.

The Real-Effective Foreign Exchange Rates

Purchasing Power Parity (J)

Japanese Economy changed not in 1990 but in 1997

BOJ Governor Shirakawa (2012) Central Banking: Before, During, and After the Crisis

Higuchi (2015) Neets, Freeters, and Job Separation for Elderly Care in Middle Age  (J)

Kenjo Yoshikazu (2019) Japan’s economy is not so bad (J)

 

National Accounting of Japan (J)

 

Annual Report on Economy and Fiscal Policies (J)

Secular Stagnation

FRB (2013) The Great Moderation 1980-2007

Eggertsson and Mehrotra (2014) A Model of Secular Stagnation, VOXEU

Lawrence Summers: Secular Stagnation Page

Robert Gordon (2016) The Rise and Fall of American Growth, Princeton University Press

Robert Gordon (2017a) Secular Stagnation: A Supply-Side View

Robert Gordon (2017b) AI and Employment: Misplaced Fears

Robert Gordon (2018) Monetary Tools, Financial Reforms, and the Next Financial Crisis

Robert Gordon Slides

MMT debate, Inside Money, and the Deficit Gamble

Does debts rollover improve economic welfare?

Blanchard (2019) Public Debts and Low Interest Rates

Robert Barro (1974) Are Government Bonds Net Wealth?

Marcus Hagedorn (2018) Prices and Inflation when Government Bonds are Net Wealth

Simon Wren-Lewis (2019) Should we worry about temporarily raising government debt? Blanchard’s AEA Address

 

Charles Wyplosz (2019) Olivier in Wonderland

 

Auerbach and Hassett (2015) Capital taxation in the 21st century

 

Lucrezia Reichlin, Adair Turner, Michael Woodford 23 September 2019 Helicopter money as a policy option

 

Kobayashi Keiichiro (2019) Confidence in the JGBs (J)

 

Kobayashi Keiichiro (2019) Why has Deflation Continued under Extraordinary Monetary Expansion?    日本語

 

Pak Katsutoshi (2019) A Review of “The Modern Money Theory” by Randall Ray (J)

 

Matsuo Tadasu (2019) A Synthesis of Macroeconomics to Support the Anti-Austerity (J)

 

Shioji Tetsuro (2018) The FTPL and the Non-Conventional Fiscal-Monetary Policies (J)

 

Kawagoe Masaaki and Hirose Tetsuki (2003) On the Fiscal Theory of Price Level (J)

 

Miyao Ryuzo (2019) Does the BOJ do the MMT policy? (J)

 

Takebe Masayoshi (2014) Considering Japanese Government Debts in the Context of the Endogenous Money Supply Theories (J)

 

Nakano Takeshi (2019) Understanding the Modern Monetary Theory (video in J)

 

Noguchi Asahi (2019) A Critical Review of the Modern Money Theory (J)

 

Lecture 3 (10/17) Introduction 2 

Lecture 4 (10/24) Introduction 3

Lecture 5 (10/31) E02. Corporate Governance

Iwai, Katsuhito (2002), The Nature of the Business Corporation: Its Legal Structure and Economic Functions, Japanese Economic Review 53(3), 243-273.
Carlo Ghosn – Japan Times
The Nissan Case
Modelling the Japanese Firms – Masahiko Aoki
     Toward a Comparative Institutional Analysis
     A Model of the Firm as a Stockholder-Employee Cooperative Game (Download it in Kyudai)
The Share Economy -  Martin Weitzman

Lecture 6 (11/7) The Japanese Employment System (Rebick: Ch. 2)
Gordon, Robert J. (2006), Issues in the Comparison of Welfare Between Europe and the United States.

Lecture 7 (11/14): More on Labor Market Issues

大卒求人倍率調査Survey on Job Openings for College Graduates

長期労働統計(Labor Market Statistics in the Long Run

コロナ禍が労働市場に与える影響(The Labor Market Impacts of the Covid-19 Pandemic

Databook of the International Labour Statistics (available only in Japanese (-.-))

Kocherlakota (2010) Modern Macroeconomic Models as Tools for Economic Policy
OECD indicators on employment protection
black companies – The Japan Times
black company (Wikipedia)

Lecture 8 (11/21)  The Lost Generation

junior labor market tightness (Recruit Works)
Employment Categories (JILPT)
Labor shift between regular and non-regular employment (MHWL)
Eiji Oguma(2019) 日本社会のしくみ (How does the Japanese Society Work?)

Lecture 9 (11/28) Economic Recovery and Inflation 1

Lecture 10 12/5 Economic Recovery and Inflation 2

Lecture 11 (12/12) Economic Recovery and Inflation 3

Lecture 12 (12/19) Supplement:  Coronavirus Pandemic and the Economy 2022

(12/26) Make Up (No Meeting)

-----Winter Break-----

PART II: Students' Presentations

Topic: World Economy in the Recovery from the Coronavirus Pandemic

Make a survey on the recovery of your home country from the Covid-19 pandemic. Focus on employment, inflation. nominal and real GDP, foreign exchange rates, economic policies by the government, and reactions by people.

Each student is allowed to speak for 15 minutes.

Submit a presentation slide set consisting of less than 15 slides to the File Sharing System before the presentation.

Convert your file to PDF and Name it as “LastName-FirstName-Economy” like Yamada-Taro-Economy.

Presentation 13 (1/9) 2 Denmark (Naoya), China (Nakagami)

Presentation 14 (1/16) 5: UK (Charlie), Algeria (Linisa)-Morocco (Salma), Spain (Bastien, Laurene)

Presentation 15 (1/23): 6: France (Victor, Jonas, Timothe), Germany (Freddy), India (Shunki)

(1/30) Make Up: South Korea (Suhyeon, LeeKyoho),  Sweden (Norman), Mexico (Segio),

Final Take-home Examination (NEW 2024)

Extra Topics

Inequality Debates

Inequality in Japan: Overview
Reconsidering Inequality
Inequality in Japan Updated

Income Inequality and Government Policies in Japan (2020, Inoue, Japanese) slide
Inequality 2015 (in Japanese)
Globalization and Inequality (in Japanese)
Branko Milanovic
The World Top Income Database

Fukao (2021) Long-run Stagnation of Labor Productivity and Real Wage

Autor, Katz, and Kearney (2007), The Polarization of the U.S. Labor Market
Thomas Piketty
Thomas Piketty’s lecture at LSE 2014 on wealth inequality
Gabriel Zucman
Krusell and Smith (2014) Is Piketty’s “Second Law of Capitalism” Fundamental?
Matthew Rognlie (2014) A Note on Piketty and Diminishing Returns to Capital
Bonnet, Bono, Chapelle, and Wasmer (2014), Capital is not back: A comment on Thomas Piketty’s ‘Capital in the 21st Century’
--- (2014), Does housing capital contribute to inequality? A comment on Thomas Piketty’s Capital in the 21st Century

Extra: Labor Productivity in Japan

Japan Productivity Center: International Comparison of Labor Productivity

Kumano (2021) Has the replacement of the emperor lowered labor productivity?

Nakao (2020) Five Myths about Productivity part 1, part 2

Agriculture

  Ministry of Agriculture, Forestry and Fisheries: Accounting for Agriculture and Food Industries, PDF

     Miho Takizawa (2016) Labor Productivity Comparison of Japan and the United States

Long-run Growth

Clark and Ishii (2012) Social Mobility in Japan, 1868-2012:  The Surprising Persistence of the Samurai, University of California, Davis
Japan and the Great Divergence, 725 to 1874
 
voxeu article
Agricultural Land Survey 1598-1872 (in Japanese)
Kyoji Fukao (2018) Historical Insights for the Long-run Stagnation of Japanese Economy (J)

General

Hiroshi Yoshikawa (2001), The Aging of Society and Fiscal Policy, in Japan's Lost Decade, International House of Japan.
Hiroshi Yoshikawa (2001), Exchange Rates, in Japan's Lost Decade, International House of Japan.
Hiroshi Yoshikawa (2001), Japan's Manufacturing and Nonmanufacturing Industries, in Japan's Lost Decade, International House of Japan.

Social Security

Angry blog post sparks movement for improved day care
Japan’s top buzzword candidates for 2016

Financial System

*Hoshi, Takeo and Anil K. Kashyap (2004) Costs and Benefits of Keiretsu Financing, in Corporate Financing and Governance in Japan, Cambridge MA: MIT Press

Hoshi, Takeo and Anil K. Kashyap (2005), Solutions to Japan's Banking Problems: What Might Work and What Definitely Will Fail,  in Reviving Japan's Economy, MIT Press 

Hoshi Takeo (2006) Economics of the Living Dead.

Allen, F. and M. Zhao (2007) The Corporate Governance Model of Japan: Shareholders are not Rulers.

Baumol, Litan, and Schramm (2007), Capitalism: The Big-Firm Wealthy Economies: Preventing Retreat and Stagnation, in Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity., Yale University Press.

Iwamoto, Yasushi (2002), The Fiscal Investment and Loan Program in Transition, Journal of the Japan and International Economics 16, 583-604.

Technology and Innovation 

Gordon, Robert J. [2000], Does the "New Economy" Measure up to the Great Inventions of the Past?, Journal of Economic Perspectives 14, 49-74.

Intellectual Property Rights

*Scotchmer (2004), Innovation and Incentives, Ch.2.

Global Financial Crises 

Allen and Gale (2007), Understanding Financial Crises, Ch.1

Ito, Takatoshi  (2004) Exchange rate regimes and monetary policy cooperation: Lessons from East Asia and Latin America, Japanese Economic Review, 55(3), 240-266,

McKinnon, Ronald, and Kenichi Ohno (1997), Dollar and Yen, MIT Press.

Adrian, T., and H. S. Shin (2008) Liquidity and Financial Contagion
The Becker-Posner Blog: Bail Out the Big Three Auto Producers? Not a Good Idea-Becker, Nov. 16, 2008.

Robert E. Hall and Susan E. Woodward (2008), The Financial Crisis and the Recession: What is Happening and What the Government Should Do.

Labor Market and Social Security

Hashimoto, Masanori and Yoshio Higuchi [2005], Issues Facing the Japanese Labor Market, in Reviving Japan's Economy, MIT Press.

Raymo, James M. and Miho Iwasawa [2005], Marriage Market Mismatches in Japan: An Alternative View of the Relationship between Women's Education and Marriage, American Sociological Review, 70, October, 801-822.

Morishima, Michio (2000), The Japanese Financial System: Its Solidarity and Vulnerability, in Japan at a Deadlock, Macmillan UK.

TAKASHI OSHIO AND WATARU SENO (2007), The Economics of Education in Japan, The Japanese Economy, 35(1), 46-81.

Patricia Boling (2008): Demography, Culture, and Policy: Understanding Japan's Low Fertility (Download pdf. file.)

Women's Economic Status and Fertility: Japan in Cross-National Perspective
S
Shirahase - The Political Economy of Japan's Low Fertility, 2007

OECD Report (2002): Health Care Reform in Japan
Porter and Teisberg (2004): Redefining Competition in Health Care

Toshimitsu Shinkawa (2006) The politics of pension reform in Japan: Institutional legacies, credit-claiming and blame avoidance,  in Ageing and Pension Reform around the World.