Can IT be Japan's Savior? / Fumio Hayashi, Koji Nomura.

Format:

Book

Author/Creator:

Hayashi, Fumio.

Contributor:

National Bureau of Economic Research.

Nomura, Koji.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11749.

NBER working paper series no. w11749

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

This paper constructs a multi-sector model to take explicit account of the very sharp change in the relative price between non-IT and IT goods. The model is calibrated to the Japanese economy, and its solution path from 1990 on is compared to Japan's macroeconomic performance in the 1990s. Compared to the one-sector analysis of Japan in the 1990s in Hayashi and Prescott (2002), our model does slightly better or just as well in accounting for Japan's output slump and does worse in accounting for the capital-output ratio. We also show that, to revive a 2% long-term growth in percapita GDP, Japan needs to direct 10% of private total hours to the IT sector.

Notes:

Print version record

November 2005.