The inflation rate in Japan has been decreasing since the beginning of the 1990s. Although weak domestic demand most probably explains a large part of the story of this deflationary trend, external factors such as the recent increase in the number of cheap imported goods, have played an...

In the thirty year period between 1960 and 1990 Japan saw labor productivity rise from a level of 27 percent of the U.S. to 87 percent of the U.S. This development miracle can be explained by an initial low capital stock and measured variations in TFP. These facts motivate our investigation into...