This paper aims to provide an alternative framework to previous studies of deflation in Japan. We focus on the real dimension of the price dynamics and propose an imperfect competition model, which describes a rent economy, where the formation of prices can be separated into the markup (level of...

This paper focuses on the real – as opposed to the monetary – side of the economy to explain price dynamics in Japan between 1981 and 2001. We use a panel industry data set to examine the impact of institutional and structural factors on the heterogeneous price dynamics in 10 manufacturing...