Transcript PowerPoint - Washington and Lee University

Bringing Asia to Economics and
Economics to Asia
経済学とアジア研究の寄り合いを求める
Michael Smitka
Dept of Economics &
East Asian Studies Program
Washington & Lee University
Economics and Asian Studies
• For Asian Studies, economics counters the
exceptionalism bias
– Japan is not unique.
• For Economics, asian studies enriches the
field, indeed is necessary
– Ultimately data-driven, a true social science
– If a variable doesn't (pardon!) vary in your data
set, you're likely to start ignoring it
But it's not automatic
• Asian Studies lacks a disciplinary core
– My own undergraduate education is an example
• Economics is organized by theory
– You will not find a "US Economy" course in
your college's curriculum!
– So why have one on Japan or China or India?
A quick example: labor relations
•
•
•
Claim: Japan's labor relations are unique
Fact: in 1980, "lifetime employment" was more
prevalent in the US than in Japan
Fact: in 1930, US labor relations looked liked
Japan's "paternalistic" ties of today
–
But the shock of the the Great Depression killed nonconfrontrational approaches in the US
Sources: Bill Sterling, Chikako Moriguchi
A standard economics example
not immediately apparent to economists, but sensible ex post
• Japan's growth is horrid
– Well, it is but…
– …so also is Switzerland's
• Most would love to have stagnate at such income
levels!
• Why?
– Is Japan unusual? - NO!
– The "Bubble"?! - NO!
Real GDP Growth
15.0%
14.0%
13.0%
12.0%
11.0%
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
1958
1956
-3.0%
Our eyes spot discontinuity
• That's the way we're built
• But the real world tends toward continuity
• For Japan:
– The working-age population is shrinking
– The economy is overbuilt
• No new investment, so slow technical change
– Structural change is slow
• Bottom line: no sources of growth
Japan provides data
• Japan's growth slowdown has consequences
– Investment falls
– Savings doesn't
• This causes huge strains
– Jargon: "flow-of-funds" suffers a shock
• July 1997 Asian economic crisis a variation thereof
• Prediction:
– All high-growth economies will face similar
problems
• Especially China!
Japan provides new problems
2050
1950 produces 2050
because Japanese didn't reproduce 1950
Duh?
Age Composition of Population
100%
90%
24
34
34
80%
24
18
15
13
12
11
11
11
30
37
35
60%
60
59
56
54
0-14 years
15-64 years
64
68
50%
70
69
40%
61
61
65+ years
67
64
59
60
30%
9
1930
1950
1960
1970
1980
0%
2050
7
36
2040
6
2030
5
33
23
2010
5
17
2000
5
12
1990
6
1908
10%
28
30
2020
20%
1888
Share of Population
70%
Demographics
• Demographics
– First society in human history with a population falling
due to human choice
– First elderly society in human history
• What will such a society look like?
– Rural towns offer possible examples
– Funding of social security
• Large-scale immigration?
– What will it mean for youth?
• Why slave to save? Eat, drink and be merry, before grandma
taxes it all away?
Our challenge: Economics
• Lots of case studies and modules that could be
used in economics
– How to convince your colleagues to displace domestic,
familiar ones with "exotic" ones
• Remind them not to fall for exceptionalism!
• Remind them of reaccreditation mandates
– However, because theory is indifferent as to which
examples, introducing "Asia" is in principle easy
Our challenge: Asian Studies
• How to add a disciplinary foundation?
– Art history is fine! Or archaeology, or religion
• Fine examples of Roman - Japan interchanges
• Fine examples of how archaeology imposes
common ways of looking at, say, spears vs. arrows
– History is much weaker as a core: too many
methodologies, too much reliance on maturity
• Doing so requires difficult curricular change
Supplemental Data
• Growth Accounting
– Basic framework, historic data
– Extension, my ad hoc projections
Growth Accounting for Japan
• Contributions, 1961-71
• 1.78
Labor
• Contributions, 1970s
• 0.68
Labor
• +0.11 Hours
• +1.09 Workers
• +0.58 Educ etc
• 2.57
• 2.78
Capital
Structural
• -0.15 Hours
• +0.68 Workers
• +0.50 Educ etc
• 0.86
• 0.42
(agri, EOS, trade)
• 2.43
• 9.56
“Knowledge”
Total
Capital
Structural
(agri, EOS, trade)
1.28
• 3.24
“Knowledge”
Total
Growth Accounting Applied
•
Sources, 1961-71
•
Sources, 1970s
•
Sources, 2000s?
•
1.78
•
0.68
•
-0.5 Labor
Labor
Labor
•
Hours +0.11
•
Hours -0.15
•
Workers +1.09
•
Workers +0.68
•
Educ etc +0.58
•
Educ etc +0.50
• Hours -0.2
• Workers -0.4
• Educ etc +0.1
•
2.57
Capital
•
0.86
Capital
•
2.43
Knowledge
•
1.28
Knowledge
•
-0.1 Capital
•
2.78
Structural
•
0.42
Structural
•
+1.0 Knowledge
(agri, EOS, trade)
•
+0.2 Structural
(agri, EOS, trade)
•
9.56
Total
•
3.24
Total
(services, trade)
•
+0.6 Total
Growth Accounting
% pa contribution: an alternate study
similar findings, despite different time periods etc
1960s
1970s
1980s
1990s
Kapital
6.9
3.8
2.8
1.9
Labor
0.4
0.0
0.4
-0.3
TFP
3.7
0.7
1.0
0.0
GDP
growth
11.1
4.5
4.2
1.6
Yoshikawa, Hiroshi (2000). Technical Progress and the Growth of the Japanese Economy – Past and Future. Oxford
Review of Economic Policy. 16:2, 36.