Published papers

This paper presents a comparison of total factor productivity (TFP) levels between the US and Japan for the period 1960–2004 and allocates the gap to individual industries. We carefully distinguish the various concepts of purchasing power parity (PPP) and measure them within the framework of a US–Japan bilateral input–output table. We also measure industry-level PPPs for capital, labor, energy, and materials inputs and output for 42 industries common to the US and Japan, based on detailed estimates for 164 commodities, 33 assets, including land and inventories, and 1596 labor categories. The US–Japan productivity gap shrank during three decades of rapid Japanese economic growth, 1960–1990. The Japanese manufacturing sector achieved parity with its US counterpart by the end of the period. With the collapse of the Japanese economic bubble at the end of the 1980s, the US–Japan productivity gap reversed course and expanded to 79.5% by 2004. This can be attributed to rapid productivity growth in the IT-producing industries in the US during the late 1990s and the sharp acceleration of productivity growth in the IT-using industries in the US during 2000–2004. Wholesale and Retail Trade emerged as the largest contributor to this gap, accounting for 25.1% of the lower TFP of the Japanese economy.

This chapter aims to systematically evaluate the economic impacts of climate change mitigation policies on the Japanese economy through a comparative analysis based on multiple economic models. Climate policies affect household real income and firms’ production costs directly through increases in energy prices, while also generating indirect effects via investment behavior and technological progress. Therefore, an integrated assessment within an interdependent economic framework is essential. The chapter first presents an analytical framework based on input–output tables and general equilibrium models, and then compares a set of policy scenarios corresponding to different emission reduction targets, examining their impacts on macroeconomic performance, industrial structure, and households. Particular attention is given to the case of Japan, where marginal abatement costs are relatively high, by explicitly analyzing the role of combining domestic measures with the use of international emission credits in mitigating economic burdens. The results indicate that under relatively moderate reduction targets, economic growth and mitigation can be compatible through expanded investment and improvements in energy efficiency. In contrast, stringent targets associated with high carbon prices lead to significant declines in real income and increased economic burdens. Although some income-buffering effects through capital accumulation are observed, discontinuous and structural changes—such as the relocation of firms abroad and the emergence of new industries—are not fully captured within the modeling framework. These findings underscore the importance of interpreting model-based policy evaluations with careful attention to underlying assumptions and uncertainties. The chapter highlights the need for feasible medium-term targets and well-designed international policy frameworks, while emphasizing that, in the long run, technological innovation is essential for reducing global marginal abatement costs.

This paper analyzes the sources of per capita real income growth in 21 Asian economies over the period 1970–2007. Real income is defined as gross national income (GNI) deflated by the household consumption price index, allowing for a welfare-consistent measure of purchasing power. The study decomposes per capita real income growth into five components: labor productivity growth, terms-of-trade effects, output price effects, changes in the employment rate, and net income transfers from abroad. This decomposition framework enables a comprehensive assessment of both domestic production factors and external influences on income growth. The results show that improvements in labor productivity have been the dominant driver of real income growth across Asian economies. In contrast, the contributions of terms-of-trade changes, employment rate growth, and net primary income from abroad are generally modest in the long run, although they can exert significant short-term effects. These findings highlight the central role of productivity enhancement in sustaining long-term income growth, while underscoring the importance of external and cyclical factors in shaping short-run fluctuations.

This paper reviews the compilation process of social infrastructure statistics in Japan, and examines recent revisions in the statistical framework in light of advances in capital measurement theory, as well as future directions for further development. Traditionally, social infrastructure statistics have been constructed primarily based on the perpetual inventory method using accumulated construction costs. However, recent revisions to the Japanese System of National Accounts (JSNA) and the adoption of the OECD capital measurement framework have led to significant changes in the underlying conceptual structure. The paper first clarifies the dual nature of capital as both “productive capacity” and “asset value,” and emphasizes the importance of shifting from the conventional concept of gross capital stock toward the concept of productive capital stock, which explicitly accounts for age-related declines in efficiency. It also discusses how consistency within the JSNA framework has been enhanced through the integrated treatment of net capital stock and consumption of fixed capital. Building on this foundation, the paper identifies four key challenges for future development: (1) improving the estimation of replacement investment through a transition from asset-based classification to activity-based sectoral definitions; (2) further disaggregation of social infrastructure as non-market assets, reflecting functional differences; (3) incorporating land into the measurement of capital services; and (4) developing asset-level identification and regional disaggregation to support asset management applications. The paper concludes that social infrastructure statistics, by advancing toward greater disaggregation and asset-level detail, can complement the aggregate structure of the JSNA and contribute to a more accurate evaluation of infrastructure functions and their associated social costs.

This paper estimates the asset service lives and the rates of depreciation based on a finely-defined classification of assets, which distinguishes 369 asset types in total, using data of the retired assets collected in the Survey on Capital Expenditures and Disposals in Japan from 2006 to 2012. This survey collected 838 thousand data of disposed assets from business accounts of private corporations, of which around 60 thousand are sold for continuous use in the production process with positive prices and are used in estimating the rates of depreciation. The difference in assumptions of remained values in retired assets generates a 1.4 percentage point gap in the estimated rate of depreciation for the whole asset stock owned by private corporations, and in turn may have a significant impact on the measurement of capital stock level. The estimated rates of depreciation on average are 20.4% for machinery and equipment and 11.3% for building and construction. Our estimates in Japan support the earlier findings in Canada of high depreciation rates and declining-balance rates for building and construction compared with the traditionally held views.

This chapter analyzes price competitiveness and productivity gaps between Japanese and US industries over the period 1955–2012. Price level indices (PLIs), defined as the ratio of purchasing power parities (PPPs) to market exchange rates, are constructed for 36 industries using detailed PPPs for 174 products derived from a bilateral Japan–US input–output table for 2005. PPPs are also developed for capital services (33 asset types) and labor input (1,680 categories cross-classified by gender, age, education, and industry). The results show that the rapid yen appreciation following the 1985 Plaza Accord severely eroded Japan's international competitiveness, while the stagnation of total factor productivity (TFP) after the collapse of the bubble economy in 1991 widened the Japan–US productivity gap. At the industry level, gaps in manufacturing largely closed, whereas persistently low productivity in domestically oriented service industries—including wholesale and retail trade, construction, and finance and insurance—emerged as the primary driver of the overall gap.

This paper examines international competitiveness by comparing productivity and price structures between Japan and the United States at the industry level. Using a disaggregated framework covering approximately 30 industries, the study integrates production prices, input structures, and productivity measures to provide a comprehensive assessment of cross-country differences. The analysis employs purchasing power parity (PPP) to compare production prices across countries and constructs productivity measures based on capital, labor, energy, and intermediate inputs within a translog production framework. This approach enables a decomposition of competitiveness into price effects and technological performance. The results indicate that Japan’s competitiveness varies substantially across industries. While some sectors exhibit strong technological performance, others remain disadvantaged due to higher relative prices and cost structures. The study further shows that differences in productivity are closely linked to input composition and sector-specific technological conditions. By integrating price and productivity comparisons within a unified analytical framework, the paper provides a structural perspective on international competitiveness and highlights the importance of industry-level analysis in understanding cross-country economic performance.

This paper develops a framework for cross-country comparison of labor input by constructing constant-quality labor measures and estimating the relative price and purchasing power parity (PPP) of labor between the United States and Japan over the period 1960–2000. Using detailed labor data disaggregated by demographic and industry characteristics, the study derives consistent measures of labor input and its price across the two economies. The results show that Japan’s aggregate labor price, which was below 15% of the U.S. level in 1960, converged rapidly and reached near parity by the early 1990s, with wage rates corresponding to approximately 105 yen per dollar by 2000. Decomposition analysis indicates that early convergence was primarily driven by labor PPP adjustments, while later movements were increasingly influenced by exchange rate fluctuations. These findings provide a consistent empirical basis for international comparisons of labor productivity and total factor productivity, and highlight the importance of quality-adjusted labor measurement in cross-country analysis.

Capital is a central factor in production and economic growth, yet its measurement remains conceptually and empirically challenging. This paper reexamines the foundations of capital measurement by focusing on the role of observability in defining measurable concepts. While existing approaches—building on the framework of Jorgenson, Hall, and Griliches and subsequent developments—have advanced the theoretical treatment of capital, they also reveal limitations when confronted with empirical implementation. The paper distinguishes two fundamental aspects of capital: capital as a productive input, measured in terms of capital services or efficiency units, and capital as an asset, reflecting its value for owners. These dual aspects are integrated through a unified measurement framework. Focusing on a homogeneous capital good, the analysis examines the coexistence of different vintages and ages, capturing both embodied technological progress and physical depreciation. It highlights the importance of quality adjustment and clarifies how underlying assumptions affect measured capital aggregates. By introducing the concept of “measurement under observability constraints,” the paper provides a consistent interpretation of gross, net, and productive capital stock within a unified framework. The results contribute to improving the conceptual and empirical foundations of capital measurement in growth accounting.

はい、適切な英訳を作成します。 In Japan, the construction of a circular economic system is recognized as an urgent policy priority. However, the current input-output tables make it difficult to describe such a system and to achieve analytical consistency between policy and economic statistics. This paper examines, through numerical examples, the recording issues in input-output tables related to scrap and by-products, recycling, reuse, reverse valuation, and second-hand goods transactions, while identifying the shortcomings of current practices, and proposes a preliminary approach to overcoming these challenges. The recording of scrap and by-products represents an issue that must be resolved for economic statistics as a whole — including the maintenance of internal consistency in the basic transaction tables of input-output accounts and the elimination of biases in GDP statistics.

This study constructs a measurement framework based on the price system of the 1990 Japan-US International Input-Output Table (164-sector classification), explicitly accounting for price interdependencies through the bilateral trade structure, and estimates commodity-specific Japan-US relative price ratios. Various international price comparison statistics — including OECD-Eurostat and ICP Purchasing Power Parity (PPP) surveys and domestic price surveys conducted by Japanese ministries — are systematically integrated within a unified analytical framework. The study derives and organizes the relationships among producer-price-based domestic production price ratios, domestic demand price ratios, and purchaser-price-based domestic demand price ratios (for household and industrial use separately), incorporating commodity-level estimates of Japan-US differentials in domestic transport and commercial margins, tariff rates, and international freight margins. The estimated Fisher Index of commodity-specific PPPs yields a value of 1.260 for total household consumption (purchaser price basis), closely consistent with the OECD-Eurostat PPP estimate of 184.94 yen per dollar for household consumption. The framework and estimates developed in this study are intended to serve as a foundation for Japan-US productivity comparisons and real input-output analysis.

This paper aims to provide an international comparison of the level of technology by industry between Japan and the United States during the period 1960-95. The methodology for the international comparison of the level of technology and the definition for the international competitiveness of industry are on the same line with our previous analysis, reported on Jorgenson, Kuroda and Nishimizu (1987), and Jorgenson and Kuroda (1990). In this paper, we tried to focus on the assessment of trends in productivity growth after the oil crisis in Japan and the U.S. We conclude that only seven industries of thirty in the Japanese industries could catch up the U.S. industries in terms of the level of productivity at the beginning of 1990s'. The productivity growth in Japan and the U.S. has revived slightly since 1980. The growth rates in the 1980s' were well below those in the 1960s'.

This study develops a multi-sector general equilibrium model for the Asia-Pacific region to analyze the interactions among economic development, energy demand, and environmental impacts under increasing global interdependence. The analysis is motivated by the international policy context shaped by the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol, which highlight the need for coordinated global action while recognizing differences in responsibilities and development stages across countries. In particular, the rapid growth of developing economies and their reliance on fossil energy raise concerns about the compatibility of economic development and environmental sustainability. The model endogenizes ten economies in the Asia-Pacific region—Japan, the United States, China, Korea, Taiwan, Singapore, Thailand, Malaysia, Indonesia, and the Philippines—which together account for a substantial share of global CO₂ emissions and are characterized by deepening economic interdependence. The analytical framework is based on an international input–output structure constructed in collaboration with national statistical agencies, combined with physical energy input data. The primary objective is twofold. First, the study aims to develop an analytical tool that can evaluate whether economic development and environmental conservation can be achieved simultaneously, taking into account structural disparities across countries. Second, it assesses the effectiveness of policy instruments—including technology transfer, carbon taxation, and emissions trading—in improving energy efficiency and reducing environmental burdens. To achieve these objectives, the model incorporates several key structural features. It captures cross-country differences in production technologies, energy efficiency, labor market structures, and demand systems. In particular, it allows for endogenous technological choice linked to factor prices, energy prices, and market size, while also enabling exogenous simulations of technology transfer from advanced to developing economies. The model explicitly represents the dual economic structure commonly observed in developing countries, characterized by surplus labor in traditional sectors and structural transformation toward modern industries. In addition, capital constraints are modeled through savings–investment balances, allowing the analysis of capital transfers associated with technological diffusion. The demand structure distinguishes between domestic consumption, investment, and exports, with investment allocation across sectors playing a key role in determining dynamic development paths. International trade is modeled through detailed bilateral linkages, where intermediate and final goods imports are decomposed by source countries, thereby capturing the propagation of economic and environmental effects across the region. The model framework is built upon an international input–output system linking national tables across the ten economies, providing a consistent representation of production, trade, and energy use. The current version presents a baseline specification (Version 1.0), with future extensions planned to incorporate more detailed institutional features, such as heterogeneity in firm ownership structures and more refined behavioral specifications for consumption and investment. The proposed framework provides a quantitative basis for evaluating policy options aimed at achieving sustainable economic development in an increasingly interdependent global economy.

This paper constructs an international input–output (I–O) table for the Asia-Pacific region as an analytical tool to capture the structure of economic interdependence. The table covers ten economies: Japan, Korea, China, Taiwan, the Philippines, Thailand, Malaysia, Indonesia, Singapore, and the United States. The work is part of a broader project aimed at developing a multi-sector general equilibrium model for the region. As a preliminary step toward this objective, a 1990 international I–O table is compiled in a non-competitive (Isard-type) framework, consistent with the requirements of the intended general equilibrium model. The table is constructed with 50 sectors (51 sectors when electricity is disaggregated into thermal and non-thermal generation), and is designed to maintain correspondence with two existing classification systems: the EDEN table (a 70-sector competitive-type I–O framework developed through international collaboration) and the IDE (Institute of Developing Economies) table (a 56-sector non-competitive I–O framework). The construction procedure combines the strengths of both frameworks. In particular, import matrices from the IDE table are used to develop a non-competitive international I–O structure, while energy input data from the EDEN framework are incorporated to capture physical energy flows. This enables the estimation of energy input coefficients and associated environmental emission coefficients linked to fossil fuel use. Based on the resulting database, the paper examines cross-country differences in energy efficiency and the structure of environmental emissions. Furthermore, by tracing trade linkages across economies, the analysis identifies channels through which environmental impacts propagate via international economic interdependence. While a full general equilibrium representation of these interdependencies is left to future work, this paper focuses on documenting the construction methodology and summarizing key empirical observations derived from the compiled international I–O table.

Objective of our analysis is to evaluate quantitatively the characteristics of the technical progress from the viewpoint of the static and dynamic production linkages. We try to define measures by which we can evaluate the total improvement of the efficiency through the spillover effect by the structural changes in all of the related commodities. Our idea will be condensed into two concepts of "Static Unit TFP" and "Dynamic Unit TFP". Our concept of the measurement of TFP is an extension of the concept of the TFP measures by the specific activity, from the viewpoints of the spillover effect of the characteristics of technical progress as a production system.

This study develops the reference-case scenario for Japan's energy supply and demand outlook using the KEO model (Keio Economic Observatory multi-sector general equilibrium model). The model endogenously solves short- and long-run producer behavior, household consumption by age-cohort of household head, labor market equilibrium, and commodity market clearing across 36 industrial and 36 commodity sectors, with explicit tracking of CO₂ emissions. Energy efficiency improvements are incorporated as exogenous scenarios derived from a bottom-up engineering model, reflecting the Top Runner program and the Keidanren Voluntary Action Plan, while the power supply side is linked to an optimal generation-mix model developed by the Central Research Institute of Electric Power Industry — forming a hybrid top-down/bottom-up framework. Under the reference scenario, real GDP grows at an average annual rate of 1.98% over 2000–2010, with final energy consumption reaching approximately 409 million kiloliters of crude oil equivalent and CO₂ emissions reaching approximately 307 million tons of carbon by 2010. These projections exceed the Kyoto Protocol target of stabilizing emissions at 1990 levels by roughly 20 million tons of carbon, primarily due to expanding energy demand in the commercial and services sector and the substitution of coal-fired generation for shortfalls in nuclear capacity. The study provides a quantitative foundation for policy evaluation toward the simultaneous achievement of economic growth, energy security, and environmental sustainability.

This study estimates energy consumption functions by end-use category for the household sector in Japan and evaluates the impact of carbon tax imposition. Energy consumption is classified into six end-use categories — transportation, space heating, cooling, water heating, cooking, and appliances — and parameters are estimated using time-series data from 1965 to 1998, with the number of durable goods owned and stock-based energy efficiency indices treated as exogenous variables. The estimated price elasticities vary considerably across end-use categories, being relatively high for space heating (−28.4%) and appliances (−30.6%), while no statistically significant values were obtained for cooling and cooking. Carbon tax simulations conducted for the year 2010 indicate that a tax of 10,000 yen per ton of carbon would reduce household energy consumption by approximately 1.1% and CO₂ emissions by approximately 1.2%, with even a high tax of 50,000 yen per ton yielding only a 4–5% reduction. The consumption functions developed in this study are designed for integration into a multi-sector general equilibrium model and are intended to contribute to the quantitative assessment of climate change mitigation policies in the household sector.

This paper develops a multi-country general equilibrium model of two interdependent international markets—refined copper and copper ore—to quantitatively assess supply disruption risks and to examine Japan’s resource policy. The model explicitly incorporates key features of non-ferrous metal markets, including the geographical concentration of mineral resources and their technological characteristics, by assuming oligopolistic behavior among ore-producing and exporting countries. Equilibrium is characterized by the simultaneous determination of international prices for refined copper, copper ore, and treatment and refining charges (TC/RC), under both market-clearing conditions and a Cournot–Nash framework. To evaluate policy instruments, the model distinguishes between long-term contract markets and spot markets for ore trade, and allows for the analysis of strategic stockpile releases. Three simulation scenarios are considered. First, supply disruptions in Chile—the world’s largest copper ore producer/exporter—are examined. A reduction in Chilean output of 200 thousand tons (4.8% of its annual production) or 400 thousand tons (9.5%) leads to substantial price increases, even when other exporting countries expand production by up to 2%. In these cases, international refined copper prices rise by 12.4% and 57.7%, respectively, while ore prices increase by 15.6% and 72.6%. To offset the price increase in the 200 thousand ton scenario, a release of 106 thousand tons of refined copper from strategic stockpiles is required. If other exporting countries cannot expand output in the short run, the price impacts become significantly larger, with refined copper prices rising by 29.6% and ore prices by 37.3%. Second, the effects of demand expansion in China—the world’s second-largest copper consumer—are analyzed. An increase in Chinese refined copper demand by 30% (459 thousand tons) or 60% (918 thousand tons) raises international refined copper prices by 18.5% and 49.7%, and ore prices by 22.9% and 61.9%, respectively, assuming no supply constraints. Given China’s relatively limited reliance on long-term contracts, such demand expansion introduces substantial instability into the ore spot market. Third, the implications of a reduction in Japan’s long-term contract imports of copper ore are examined. A 30% decrease (300 thousand tons), requiring increased reliance on spot procurement, results in price increases of 7.7% for refined copper and 6.1% for ore. Although exporting countries can redirect volumes to the spot market, profit-maximizing behavior prevents full adjustment, leading to upward pressure on international prices. The results highlight the structural vulnerability of international copper markets and underscore the importance of long-term contracts and strategic stockpiling in mitigating supply risks and price volatility.

This paper examines the appropriate design of Japan’s climate change policy by revisiting the discussions on the mid-term emission reduction targets conducted throughout 2009, with particular attention to the issues of efficiency and equity. To this end, it first reviews the current state of climate policies in the European Union and the United States, highlighting that the formulation of mid-term targets incorporates not only domestic and intra-regional mitigation efforts but also international mechanisms, and that policy instruments—especially economic instruments—are typically designed and discussed in an integrated manner. Based on this perspective, the paper conducts a quantitative economic assessment of several alternative mid-term targets considered in Japan in 2009 (e.g., −7%, −15%, and −25% relative to 1990 levels), focusing on domestic mitigation measures. The results indicate that achieving these targets solely through domestic actions would entail substantially high marginal abatement costs for Japan. In particular, for the internationally pledged target of −25%, the marginal abatement cost could differ by nearly an order of magnitude compared to those in the EU and the United States. Consequently, the estimated economic burden on real GDP and households is also significant. Given such large international disparities in marginal abatement costs, a policy approach relying exclusively on domestic measures would impose substantial burdens on the Japanese economy, both at the macro level and in terms of international competitiveness, raising concerns about its sustainability. The paper therefore evaluates policy scenarios that combine domestic measures with international mechanisms, such as the use of overseas credits. The analysis shows that such combinations can reduce the overall economic burden. In this context, macroeconomic costs are determined by three key factors: (1) the level of the emission reduction target, (2) the assumed price of international credits, and (3) the share between domestic measures and the use of international credits. This implies that similar macroeconomic outcomes can be achieved through multiple policy combinations. The findings suggest that, for Japan’s climate policy to be sustainable, the domestic emission reduction targets should be set in a manner consistent with marginal abatement costs in other advanced economies, and that appropriate mechanisms for carbon pricing should be introduced. At the same time, if a target such as −25% relative to 1990 is maintained, it is necessary to determine an optimal mix of domestic measures and international credit use, taking into account the acceptable level of economic burden for society. Achieving such flexibility requires the introduction of suitable economic instruments, the development and effective operation of international credit mechanisms, the strengthening of institutional capacity, and continued technological innovation toward a low-carbon society.

This paper examines recent international developments in capital measurement since the 1990s and discusses the direction of revisions in Japan’s capital stock statistics within the System of National Accounts (SNA). Particular attention is given to the introduction of the capital services concept in the 2008 SNA and the OECD Capital Manual, which provides an integrated framework for measuring both the productive capacity and the value of capital. At the international level, methodological advances—driven by initiatives such as the Canberra II Group—have led to the incorporation of productive capital stock and capital services, moving capital measurement toward a more unified treatment of theory and statistical practice. In contrast, Japan’s existing capital stock statistics face several challenges, including reliance on benchmark-year methods, highly aggregated asset classifications, and limited empirical foundations. To address these issues, the paper proposes three key directions for reform: (1) the integration of capital stock and capital services within a consistent measurement framework; (2) substantial disaggregation of asset classifications and their systematic linkage to production accounts; and (3) the development of a stronger empirical basis for capital formation statistics. In particular, the construction of a “production asset table” linking production and capital formation, together with new statistical surveys such as those on acquisition and retirement of assets, is highlighted as essential for improving measurement accuracy. The paper concludes that advancing capital measurement is critical for bridging economic statistics with physical stock accounts and for strengthening the analytical foundation of a resource-circulating economy. A systematic reconstruction of Japan’s capital statistics, aligned with international standards, is therefore required.