Transcript Japan`s Modern Economy

Japan’s Modern Economy
September 11, 2007
Economics 272
Models of growth
• Extensive growth
– Expansion of margins
• Constant returns to scale; quantitative not qualitative
• Intensive growth
– Higher output per inputs
• Labor productivity
– Y/L: Y is GDP, L is pop or LF
• Total factor productivity
– Relative to inputs of labor and capital
Why growth?
• Solow capital intensive
– Hits diminishing returns, cf. old USSR
• Smithian growth
– Specialization and trade
• Leads to higher productivity
• “Division of labor is limited by the extent of the market”
• Schumpeter technology-led growth
– “Modern” growth
• Historically all fought against Malthus!
Dfn “Modern” = ?
• Smithian “division of labor”
– Non-farming population, esp urbanization
– Commercial agriculture
– Within monetary economy
– Transportation / extent of market
– Public order
Government role
• Government taxation paid for urbanization
– Created a huge (cash) market
– Edo was world’s largest city from by 1700
• the Edo “bakufu” fostered navigation
– port and lighthouse development
– maps etc. all by around 1720
• formal financial markets promoted
–
–
–
–
rice futures market in Osaka by 1720
transferring money in place of in-kind taxes
insurance markets (esp. casualty)
local (rural) finance by 1800s
Market-oriented economy
• especially intense development in several regions
– cash-crop farms around Osaka (farmers bought food!)
– large urban consumer market
• commercial elite for whom political advancement was
foreclosed (cf. English Dissenters)
• education spread.
– ukiyoe were for mass-market (wedding presents…)
– lots of agricultural handbooks - 200+ titles in print
Specialization by the “kuni”
(export products)
• Silk, cotton, salt, lumber, paper, fish
• Some regions largely industrial
• Seasonal “proto-industry” often accompanied
by regional migration
• Both men & women active in wage labor
outside the home
Standard of Living
• transformation of consumption
– various rough fibers replaced by cotton; silk worn by more than just
elite
– new (and better foods). peppers, sweet potatoes / taro, corn, etc.
– new and better housing: tatami mats off the ground
– vast increases in protein-laden soybean-related consumption (miso,
soy sauce)
• Education
– Literate society, perhaps more so than England!
– Vast outpouring of books, circulated through lending libraries
– Even nascent “western” studies, esp. in 1800s
Mid-16th Century Han
(“countries”)
Shipping Routes after 1720
Loom (karabikibata)
c. 1770
Agriculture Outgrows
Population
Tokugawa Population & Agriculture
50.00
46.00
42.00
38.00
34.00
30.00
26.00
22.00
18.00
14.00
10.00
1600
1650
Population (millions)
1700
1720
1730
1750
Arable Land (100,000 í¨)
1800
1850
1872
Agricultural Output
Osaka as an Entrepot (1714)
Principal non-Rice Imports / Exports
Imports
Marine products
Agricultural items
Clothing & textiles
Oilseed
Mining products
Fertilizer
Wood products
Misc Imports
Tea & tobacco
Tatami
Kyoto crafts
Total (Ag value)
20.2%
19.5
15.4
12.9
7.5
6.4
5.9
4.1
2.8
2.0
0.9
286,561 kan
Exports
Oil & beeswax
36.4%
Clothing & textiles
25.2
Misc tools
7.5
Misc exports
7.3
Processed food
6.1
Accessories & decorations 5.8
Lacquerware & pottery 4.6
Seedcake (fertilizer)
3.4
Furniture
0.5
Weapons
0.5
Arts & crafts
0.4%
Total
95,800 kan
Growth of a National Market
Rice Price Movements Converged in the 17th Century
Structure of
National Output
– 1874 –
• shortly after “opening”
to the West
• before significant
structural change from
– new technologies
– convergence of domestic
& international prices