Outline of ESRI Research Project
"The Japanese Economy and Macroeconomic Policies
from the Beginnings of the Bubble to the Overcoming of Deflation"

March 21, 2008
Economic and Social Research Institute,
Cabinet Office, Government of Japan

1. Objective

        In the course of 60 years of postwar history, and especially during past 25 years subsequent to the two successive oil crises, Japan was swept by the waves of globalization, and was forced to experience fundamental changes in its economic and social structures. From the beginnings and collapse of the bubble, and through the long dark tunnel of the so-called "lost 10 years," and finally an economic expansion that began in 2002 has continued ever since, Japan is now facing an important turning point to get its economy back on track again.
        The series of macroeconomic policies and various structural reforms that were implemented during this period show how Japan struggled through an economic collapse; it showcased a rare process of policy trial and error not only within the history of the Japanese economy but within world history. This experience will provide future generations with valuable lessons.
        ESRI would like to take this opportunity to produce an accurate and evidence-based description of the economic trends and policies of this period, from the beginnings and collapse of the bubble, to the subsequent onset of and struggle against deflation. Moreover, we will examine and evaluate the economic performances of this period and hand down our reflections and lessons learned to contribute to the future of the Japanese economy and to economic policy management.

2. Scheme

(1) Evidence-Based Historical Descriptions and Oral History
        Evidence-based descriptions of Japan’s economic situations and an outline of policies implemented during the period will be compiled. A chronology and a collection of important policy documents will also be produced.
        Interviews of the officials involved in policy decisions during the relevant period (including those who took part in policy decision processes as council members) and to citizens in various areas (such as business managers) will be conducted.

(2) Analyses and evaluations on economic mechanisms and policy effects
        Analyses on such mechanisms as cause and effect of economic phenomena and evaluations on various policies conducted during the relevant period will be conducted.
        Seven research areas have been set, and papers on 94 research theme will be written by Japanese researchers from an academic and analytic point of view. Opinions from various standpoints will be included to keep our stance as neutral as possible.

(3) International Collaboration Project (This Workshop)
        Ten themes have been selected from four research issues (bubble, monetary policy since 1985, real side explanations of long-term stagnation, and institutional factors affecting the Japanese economy since 1985).
        Papers will be discussed in this workshop and in the next conference scheduled in FY 2009. A roundtable discussion on the lessons the world has learned from the experience of Japan’s bubble, deflation, and long-term stagnation will be held in the next conference.

4. Study Team (for the history part, and the analyses and evaluations part)

5. Schedule

* The schedule is subject to change.

6. Requests to the NY Workshop by ESRI

        We are planning a special round-table discussion on lessons from Japanese experiences in the next conference in FY 2009. We expect that this workshop and the entire international collaboration project will give us many new insights into the questions raised above.

Research Themes in " Analyses and Evaluations Part "
in Seven Research Areas

* Research themes below are subject to change.