| Budget Amount *help |
¥1,300,000 (Direct Cost: ¥1,300,000)
Fiscal Year 2005: ¥500,000 (Direct Cost: ¥500,000)
Fiscal Year 2004: ¥800,000 (Direct Cost: ¥800,000)
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| Research Abstract |
This study develops a new decomposition analysis of productivity based on the Hicks-Moorsteen productivity index approach, and applied it to investigating the stagnation in productivity of the Japanese economy in the 90s. Unlike the standard analysis based on the Solow residuals or The Tornqvist index, the proposed decomposition analysis of productivity has an advantage that the existence of productive inefficiencies is allowed. For our purpose, this is appealing because it makes the impacts of inefficiencies on productivity measurable. Formally, we show that the Hicks-Moorsteen productivity index can be decomposed into the factors of technical advance, efficiency, scale and mix effects of inputs and outputs. The empirical analysis is conducted using three data sets : a panel on OECD 17 countries (1965-1990) including Japan, a panel on 47 Japanese prefectures (1981-2000), and time series of the Japanese macro economy and industries (1981-1998). Those results reveal some interesting aspects of productivity change in the Japanese economy. First, productivity in the 80s was still on the process of catching up the developed countries in the sense that improvement in efficiency raised the productivity toward the level of the developed countries throughout the 80s. Second, the stagnant productivity in the 90s is mainly attributable to inactive technical advance while a temporary recovery of productivity in 1996 was driven by the improvement in efficiency reflecting an increase in demand. Third, an advance in IT might raise the productivity of several sectors in the manufacturing industry in the late 90s by boosting the technical advance factor.
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