Revisiting Japan's External Adjustment Since 1985
Summary:
The factors that explain Japan’s external performance since the mid-1980s are controversial. While the current account surplus eventually declined following exchange rate changes in 1985-86, a widening since 1990 has led to renewed scepticism about the role of relative price movements in bringing about external adjustment. This paper revisits the post-1985 experience to determine whether it can be explained by traditional factors. The results indicate that, over the period as a whole, the behavior of trade volumes and prices was similar to that predicted by traditional relationships. In particular, relative price movements played an important role in reducing the surplus: in their absence, it would have widened further.
Series:
Working Paper No. 1993/052
Subject:
Export prices Exports Import prices Imports International trade Price elasticity Prices Trade balance
English
Publication Date:
June 1, 1993
ISBN/ISSN:
9781451847178/1018-5941
Stock No:
WPIEA0521993
Pages:
26
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