TY  - JOUR
AU  - Hayashi,Fumio
AU  - Nomura,Koji
TI  - Can IT be Japan's Savior?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11749
PY  - 2005
Y2  - November 2005
UR  - http://www.nber.org/papers/w11749
L1  - http://www.nber.org/papers/w11749.pdf
N1  - Author contact info:
Fumio Hayashi
Hitotsubashi University
Grad. School of International Corporate Strategy
2-1-2 Hitotsubashi, Chiyoda-ku
Tokyo 101-8439
JAPAN
Tel: 81-3-5841-5652
Fax: 1-801-469-0086
E-Mail: fumio.hayashi@gmail.com

Koji Nomura
Keio University
E-Mail: nomura@sanken.keio.ac.jp
AB  - This paper constructs a multi-sector model to take explicit account of the very sharp change in the relative price between non-IT and IT goods. The model is calibrated to the Japanese economy, and its solution path from 1990 on is compared to Japan's macroeconomic performance in the 1990s. Compared to the one-sector analysis of Japan in the 1990s in Hayashi and Prescott (2002), our model does slightly better or just as well in accounting for Japan's output slump and does worse in accounting for the capital-output ratio. We also show that, to revive a 2% long-term growth in percapita GDP, Japan needs to direct 10% of private total hours to the IT sector.
ER  -