NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Taisuke Uchino

College of Economics
Daito Bunka University
1-9-1 Takashimadaira Itabashi Tokyo
175-8571 Japan

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NBER Working Papers and Publications

February 2011Pass-Through of Oil Prices to Japanese Domestic Prices
with Etsuro Shioji
in Commodity Prices and Markets, East Asia Seminar on Economics, Volume 20, Takatoshi Ito and Andrew K. Rose, editors
April 2010Pass-Through of Oil Prices to Japanese Domestic Prices
with Etsuro Shioji: w15888
In this paper, we investigate changes in the impacts of world crude oil prices on domestic prices in Japan. First, we employ a time-varying parameter VAR (TVP-VAR) approach to confirm that the rate of pass-through of oil prices declined, both at the aggregate and sectoral levels, for the period 1980-2000. Second, by utilizing Input-Output Tables, we find that changing cost structure of Japanese firms goes a long way toward explaining this decline. That is, by the year 2000, oil had become a much smaller component of the Japanese production cost structure. We further find that much of this is attributable to changes in relative prices: as oil became cheaper, it became less important in the overall cost structure, and thus pricing behaviors of firms became less responsive to its prices. Subs...

Published: Pass-Through of Oil Prices to Japanese Domestic Prices, Etsuro Shioji, Taisuke Uchino. in Commodity Prices and Markets, East Asia Seminar on Economics, Volume 20, Ito and Rose. 2011

 
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