tag:blogger.com,1999:blog-17232051.post6499115371909614303..comments2024-03-28T03:16:14.104-04:00Comments on Noahpinion: What happened to Japan?Noah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger33125tag:blogger.com,1999:blog-17232051.post-58906346246355089862012-08-23T17:19:28.345-04:002012-08-23T17:19:28.345-04:00HK and Singapore have caught up, but I have family...HK and Singapore have caught up, but I have family in Taiwan and my wife is from Japan, so I speak from personal experience when I say that the standard of living for someone with the same type of job (say, a schoolteacher) isn't really the same between the 2 countries. Taiwan is still quite a bit more primitive.Richardnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20097921054646175512012-08-11T05:13:11.755-04:002012-08-11T05:13:11.755-04:00Coming from most people this would worry me, but s...Coming from most people this would worry me, but somehow I feel like this is a compliment...Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-23494755159216766072012-08-10T15:36:31.053-04:002012-08-10T15:36:31.053-04:00You remind me increasingly of Lutz.You remind me increasingly of Lutz.Anonymoushttps://www.blogger.com/profile/12491843399397316005noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-23510064223317506402012-08-10T00:04:37.287-04:002012-08-10T00:04:37.287-04:00ah, real exchange rate...ah, real exchange rate...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-64531052955195255762012-08-09T12:03:01.733-04:002012-08-09T12:03:01.733-04:00Unfortunately the chart at the bottom is completel...Unfortunately the chart at the bottom is completely wrong, seeing as the exchange rate now is 78 yen to the dollar and in 1970 it was 300...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-16765533784312044482012-08-08T01:29:21.117-04:002012-08-08T01:29:21.117-04:00Er - no - South Korea is NOT on the brink of overt...Er - no - South Korea is NOT on the brink of overtaking Japan. As mentioned, the PPP adustments are flawed and market rates are close to fair value. On a per head basis Japan is TWICE as wealthy as South Korea and Taiwan too, for that matter.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-90599008445880276982012-08-07T23:27:08.086-04:002012-08-07T23:27:08.086-04:00OK, then look at Hong Kong, Taiwan, and Singapore ...OK, then look at Hong Kong, Taiwan, and Singapore then. In 1985 (before bubble started), Japan was richer than all three. Today, all three are substantially richer than Japan. <br /><br />And South Korea is on the brink of overtaking Japan. In 1985, their GDP pc was 1/3rd japan's.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-78441762623788501762012-08-07T06:51:52.439-04:002012-08-07T06:51:52.439-04:00Incidentally, the commonly used PPP adjustments(co...Incidentally, the commonly used PPP adjustments(cooked up by the OECD?) are way off, in my view. As Noah, says the yen is not overvalued at 75-80 - check ou not just Big Mac, but minimum wages, hotel rooms, anything else. <br /><br />The idea that the South Korean standard of living is on the brink of overtaking Japan's is likewise way off.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-53475078866223956102012-08-06T13:57:06.165-04:002012-08-06T13:57:06.165-04:00During the miracle years firms were not financiall...During the miracle years firms were not financially constrained. The OECD has time series estimates of the natural rate of unemployment (NAIRU) among other sources.Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-79593356154989980552012-08-06T05:50:13.239-04:002012-08-06T05:50:13.239-04:00Of course, there are some goods and services with ...Of course, there are some goods and services with positive externalities (which makes a strong for gov spending, by the way), but overall, the impact of diminishing returns is stronger.<br />What really hinders growth in developing countries is corruption, crime and political violence. Once you factor that into your regressions, evidence of convergence becomes overwhelming. It was already the case in the mid 90's, and I would expect that is even more evident now, with a decade of record growth in BRIC and other emerging economies.Zorbloghttps://www.blogger.com/profile/03175779746756984479noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-5229599064305307692012-08-05T21:41:40.430-04:002012-08-05T21:41:40.430-04:00Mark,
but how is (3) feedback from cyclical to Lo...Mark,<br /><br />but how is (3) feedback from cyclical to Long Run? These are structural issues, so by definition long run. Morover, were these inefficiencies absent during the miracle years? If not, why didn't they matter? Finally, how does one go about finding what the natural rate really is? I say, if for over twenty years your unemployment rate has been hovering around x%, then that is your natural rate!CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-51844984509247530222012-08-04T20:29:09.528-04:002012-08-04T20:29:09.528-04:00Well, think of taking vacations as a coordination ...Well, think of taking vacations as a coordination problem...Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-44605380038480462832012-08-04T18:24:10.791-04:002012-08-04T18:24:10.791-04:00Some points about the post:
There are three separ...Some points about the post:<br /><br />There are three separate factors at work here:<br /><br />1) Long Run<br />2) Cyclical<br />3) Feedback from Cyclical to Long Run<br /><br />1) Noah's right in a sense about the long run. Japan's labor productivity (GDP per hour) growth was slowing down sharply before 1990 and has held close to 70% of the US level since 1990. Japan's nontradable sectors such as retail and wholesale trade and food service are notoriously inefficient and this is unlikely to change. Hours worked per worker has also followed a long term trend downward. This accelerated during the 1990s and may be Lost Decade related. Labor force participation started to decline in the 2000s due to demographics.<br /><br />2) Ryan Avent is right about the cyclical factors. Japan's output gap grew from 3% of GDP in 1990 to 12% of GDP by 2002 according to BOJ estimates. Noah makes much of Japan's low unemployment rate but it doesn't tell the whole story as the natural rate of unemployment is far lower than in the US and there are far greater ties between employer and employee in Japan than in the US so hours are cut far more before workers are let go (a form of informal work sharing). The output gap narrowed by 2007 but is now large again, as it is almost everywhere.<br /><br />3) There is some research that claims that constraints on corporate lending since 1990 have slowed the rate of productivity growth in Japan. In Japan corporate debt is a bigger problem than household debt. Corporations are very dependent on banks for financing. Banking is also highly inefficient in Japan and loans usually involve a lot of nepotism so the least efficient corporations have been securing the finance since 1990.Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-90124630650231414652012-08-04T18:04:08.095-04:002012-08-04T18:04:08.095-04:00"No one looks good in skinny jeans." And..."No one looks good in skinny jeans." And turn the music down. <br /><br />There's a recent felix salmon post about a large proportion of Japanese voters (the elderly) favouring deflation over growth. Sadly as an old fogey like you I can't do links.Lukenoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-84326117789358560162012-08-04T14:40:23.770-04:002012-08-04T14:40:23.770-04:00himimaginary,
You are misreading what I wrote. I...himimaginary,<br /><br />You are misreading what I wrote. I noted it wasn't a surprise that the bureaucracy wasn't able to react competently in 1985 given it had been so effectively gutted by that point. You might as well be arguing that Mark Spitz wasn't much of a swimmer since you didn't see him on the podium yet in London. <br /><br />I cannot comment on the paper you cited as I don't have time to read it now. Apologies.Mike Kimelhttps://www.blogger.com/profile/08242504119580193377noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-25533134401398723742012-08-04T12:09:31.141-04:002012-08-04T12:09:31.141-04:00Noah: " I suspect that what difference exist...Noah: " I suspect that what difference exists is due to labor inputs, since Japan does not force its citizens to take lots of time off of work the way Germany and France do."<br /><br />I'm sure that those salarymen just love those long hours.<br /><br />Seriously, why would you look at Japan and talk about what Germany and France 'force' people to do?Barry DeCiccohttps://www.blogger.com/profile/04735814736387033844noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-38065974679213207032012-08-04T11:01:56.963-04:002012-08-04T11:01:56.963-04:00Go back to 1985, before the bubble, and Japanese G...Go back to 1985, before the bubble, and Japanese GDP per capita (PPP) was three times Korea's. Now it looks like Korea will overtake Japan on the same measure by 2014... and while Japan is definitely comparable to much of Europe in terms of GDP (PPP), Japanese do work substantially more than, say Germans. <br /><br />Another comparison, in 1990, Japan had lower suicide rates than Norway -- now Japan has much higher suicide rates... <br /><br />True, Japan has not turned into Sub-Saharan Africa, but the real question is whether Japan has done better than Japan could have done with a better monetary policy. You need to argue that all those times the Bank of Japan raised interest rates with inflation below 1% just before the onset of those recessions, mild as they were, was the right policy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-84129682510565199972012-08-04T09:37:48.125-04:002012-08-04T09:37:48.125-04:00I hope you will post on the aging and shrinking po...I hope you will post on the aging and shrinking population and the effect on the economy and on social security. When you say that Japanese houses are built of shoddy materials are you talking about their non-concrete worshiping traditional houses or the modern ones? You are completely wrong about skinny jeans which look good on short people and even better on short skinny people.Cheryl & ethnovethttps://www.blogger.com/profile/17061009112004529673noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-11666698726850967152012-08-04T05:08:17.370-04:002012-08-04T05:08:17.370-04:00This post assumes that there isn't something p...This post assumes that there isn't something puzzling about European growth rates over the past 30 years, and I am not so sure that is true.A Hhttps://www.blogger.com/profile/06916657901677009228noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-26654748578646280482012-08-03T23:48:01.515-04:002012-08-03T23:48:01.515-04:00"No one looks good in skinny jeans."
I k..."No one looks good in skinny jeans."<br />I kinda like the way young girls butts look with skinny jeans. That said, please remember just because you are wearing "relaxed fit" jeans your butt still looks fat (huge).dilbert dogbertnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-7528130967641838562012-08-03T22:52:16.987-04:002012-08-03T22:52:16.987-04:00"The Krugman post said only this about Japan:..."The Krugman post said only this about Japan:"<br /><br />You dropped the most important part:<br />"Then things started to go wrong, and the MOF proved itself as hapless in action as it was in appearance. It's easy to look competent in a prosperous economy (ask Bill Clinton), but the true test is whether you can cope with adversity. So much for the legendary managers of Japan Inc."<br /><br />And the sources you cited depend largely on "Todai-myth", and ignore the possibility that it's just that the other universities' quality was catching up that of Tokyo university.<br /><br />"The big surprise to westerners was how much influence the bureaucracy had despite the fact that none of it was codified. People were similarly surprised about how the zaibatsu/keiretsu companies worked together too."<br /><br />Professor Miwa is famous for debunking those conceptions as pure myths (although maybe the paper I linked was not clear enough about his position on this matter). As for keiretusu, he wrote the following paper:<br />http://www.cirje.e.u-tokyo.ac.jp/research/dp/2001/2001cf109.pdfhimaginaryhttps://www.blogger.com/profile/03409531853330541896noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-69946668036761355182012-08-03T19:36:46.293-04:002012-08-03T19:36:46.293-04:00You had me laughing at "inborn powers of Japa...You had me laughing at "inborn powers of Japanese race" because in most european countries people still have somewhat similar opinion on Japanese and Korean societies. <br />Having lived and worked in Korea I find those things damn funny. True, they have impressive work ethic but they also have a big productivity problem. Rigid deference to people higher in hierarchy, endless meetings that produce nothing, pay base on seniority, workers surfing on smartphones while waiting for their boss to go home so they could go after him. I found the whole thing absurd(only the working part, I loved almost everything else).<br />After my one year stint I went to Vienna, to work for the same MNC. To keep it short, 40 hour work week in Vienna equates to 70h work week in Seoul.<br /><br />About Japan, why does nobody mentions demographics?<br />Japan’s population in median age terms is the oldest on the planet and it's getting worse. To offset the worsening of population dependency ratio Japan will eventually need higher growth than most developed economies just to maintain the same standard of living. <br />Reader from CroatiaAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-54081727747642429472012-08-03T15:22:57.719-04:002012-08-03T15:22:57.719-04:00Zorblog,
there are test of endogenous growth theo...Zorblog,<br /><br />there are test of endogenous growth theory that are quite favorable (Zachariadis, 2003; Ha and Howitt, 2008). <br /><br />Keep in mind, however, that convergence in growth rates is consistent with endogenous growth. See for example Howitt (2001), and Ertur and Koch (2011). The reason is that knowledge has no borders. If ideas flow, then the whole world will eventually benefit from the expansion of the technological frontier by countries like the U.S. or Germany, so in the long run everyone should converge at the same growth rate. Regarding the level of income, just like the Solow model, endogenous growth predicts conditional convergence. Countries that invest less in R&D or education will be further away from the technological frontier since they will adopt the new technologies with a greater lag (but that distance will be stable, everything else being the same). <br /><br />Everything put together, it seems that in the end the growth process will resemble that in Lucas's (2001) "Some Macroeconomics for the 21st century". Countries that have the "right" economic environment will be able to harness the full potential of technical progress that was unleashed around the industrial revolution and will move away from other economies. Then, as those who are left behind reform, they will join one-by-one the cluster of leaders. There may still be differences reflecting the peculiarities of each economy, but these will be small.CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-9642313607502578882012-08-03T15:01:37.654-04:002012-08-03T15:01:37.654-04:00"No one looks good in skinny jeans. And no on..."No one looks good in skinny jeans. And no one beats the Solow Model."<br /><br />This must be one of the best lines I have read on convergence!CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-27758771379965351102012-08-03T14:16:34.477-04:002012-08-03T14:16:34.477-04:00himimaginary,
The Krugman post said only this abo...himimaginary,<br /><br />The Krugman post said only this about Japan: "I visited the MOF in 1985 and saw what looked less like the Pentagon's War Room than like the Department of Motor Vehicles"<br /><br />In my post I cite a few different sources that indicate a rapid deterioration (depending on the source, and the factor deteriorating) beginning in either the mid-70s or early 1980s. So the fact that Krugman saw a mess in 1985 would not be inconsistent with the documents I cited or the conclusion I reached.<br /><br />As to the first document you cite, have you read it? They indicate that the bureaucracy lacked the legal tools to accomplish what people have claimed they pulled off. But that isn't a surprise. The big surprise to westerners was how much influence the bureaucracy had despite the fact that none of it was codified. People were similarly surprised about how the zaibatsu/keiretsu companies worked together too.Mike Kimelhttps://www.blogger.com/profile/08242504119580193377noreply@blogger.com