Arbeitspapier

Growth, secular stagnation and wealth preference

In 1960s - 1980s Japan enjoyed high economic growth. In the early 1990s, however, the growth rate drastically declined and thereafter Japan has been suffering secular stagnation. This paper proposes a dynamic macroeconomic model that can consistently explain such a drastic change in economic performance. Wealth preference plays an important role. In the early stage consumption grows at the same pace as productivity increases. Once consumption reaches a certain level, however, it deviates from the full-employment level and aggregate demand deficiency appears. After that the economic growth rate asymptotically approaches zero even if productivity keeps on increasing, and secular stagnation arises.

Language
Englisch

Bibliographic citation
Series: ISER Discussion Paper ; No. 946

Classification
Wirtschaft
Business Fluctuations; Cycles
General Aggregative Models: Neoclassical
Subject
long-run stagnation
aggregate demand deficiency
wealth preference
fair wages
economic growth
Japan

Event
Geistige Schöpfung
(who)
Ono, Yoshiyasu
Event
Veröffentlichung
(who)
Osaka University, Institute of Social and Economic Research (ISER)
(where)
Osaka
(when)
2015

Handle
Last update
10.03.2025, 11:46 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Ono, Yoshiyasu
  • Osaka University, Institute of Social and Economic Research (ISER)

Time of origin

  • 2015

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