Japanese growth and strongstagnationstrong a Keynesian perspective.pdf

University of Massachusetts - Amherst ScholarWorks@UMass Amherst Economics Department Working Paper Series Economics 2006 J apanese growth and stagnation: a Keynesian perspective Takeshi Nakatani Peter Skott University of M assachusetts - Amherst Follow this and additional works at : /econ_workingpaper Part of the Economics Commons Nakatani, Takeshi and Skott, Peter, J apanese growth and stagnation: a Keynesian perspective (2006). Economics Department Working Pap er Series. Paper 57. /econ_workingpaper/57 This Article is brought to you for free and open access y the Economics at ScholarWorks@UMass Amherst. It has been accepted for inclusion in Economics Department Working Paper Series y an authorized administrator of ScholarWorks@UMass Amherst. For more information, please contact scholarworks@. DEPARTMENT OF ECONOMICS Working Paper Japanese growth and stagnation: a Keynesian perspective by Takeshi Nakatani and and Peter Skott Working Paper 2006-4 UNIVERSITY OF MASSACHUSETTS AMHERST Japanese growth and stagnation: a Keynesian perspective y z Takeshi Nakatani and Peter Skott February 16, 2006 Abstract This paper uses a modiÖed Harrodian model to understand both the long period of rapid Japanese growth and the recent period of stagnation. The model has multiple steady-growth solutions when the labour supply is highly elastic, and government intervention, we argue, took the Japanese economy on