The Stagnation of Household Consumption in Japan
33 Pages Posted: 31 Mar 2004
Date Written: February 2004
Abstract
In this paper, I consider the extent to which the stagnation of household consumption is responsible for the decade-long recession in Japan during the 1990s and early 2000s and the reasons for the stagnation of household consumption during this period. I find that the stagnation of private investment (and inventory investment) rather than that of household consumption was the major cause of the decade-long recession, that household consumption was nonetheless relatively stagnant during this decade, and that the stagnation of household consumption was due primarily to the stagnation of household disposable income, the decline in household wealth (which in turn was due primarily to the collapse of land and equity prices), and to a lesser extent, increased uncertainty about the future (especially about old age in general and old-age pensions in particular), the deterioration of future prospects, and deflationary expectations concerning consumer prices.
JEL Classification: E21, E32
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Is the Japanese Extended Family Altruistically Linked? A Test Based on Engel Curves
-
Are the Japanese Unique? An Analysis of Consumption and Saving Behavior in Japan
-
Bequest Taxes and Accumulation of Household Wealth: U.S. - Japan Comparison
By Thomas A. Barthold and Takatoshi Ito
-
Aging, Saving, and Public Pensions in Japan
By Charles Yuji Horioka, Wataru Suzuki, ...