The depressing effect of agricultural institutions on the prewar japanese economy

Fumio Hayashi, Edward Prescott

Research output: Contribution to journalArticle

55 Citations (Scopus)

Abstract

Why didn't the Japanese miracle take place before World War II? The culprit we identify is a barrier that kept prewar agricultural employment constant. Using a standard neoclassical two-sector growth model, we show that the barrier-induced sectoral distortion and an ensuring lack of capital accumulation account well for the depressed output level. Without the barrier, Japan's prewar GNP per worker would have been at least about a half of that of the United States, not about a third as in the data. The labor barrier existed because, we argue, the prewar patriarchy forced the son designated as heir to stay in agriculture.

Original languageEnglish (US)
Pages (from-to)573-632
Number of pages60
JournalJournal of Political Economy
Volume116
Issue number4
DOIs
StatePublished - Aug 2008

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Japanese economy
Labor
Agriculture
Patriarchy
Gross national product
Japan
Capital accumulation
Second World War
Workers
Two-sector growth model

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

The depressing effect of agricultural institutions on the prewar japanese economy. / Hayashi, Fumio; Prescott, Edward.

In: Journal of Political Economy, Vol. 116, No. 4, 08.2008, p. 573-632.

Research output: Contribution to journalArticle

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