Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Bank of Japan : (Research Paper) A structural factor analysis on Japan's industrial production

07/25/2013 | 05:22am US/Eastern

July 25, 2013
Yusuke Kumano*
Ichiro Muto**
Akihiro Nakano***

Abstract

Since the mid-2000s, Japan's industrial production (IP) has been characterized by increasing volatility. To examine the background to this, we apply the structural factor analysis developed by Foerster, Sarte, and Watson (2011) and decompose variations in Japan's IP into aggregate and sectoral shocks taking input-output relationships between sectors into account. We find that aggregate shocks explain most of the fluctuations in Japan's IP and are highly correlated with variations in overseas economic growth, especially since the early 2000s. However, we find a large increase in the relative importance of sectoral shocks when focusing on the more recent increase in the volatility of IP. Specifically, our analysis suggests that the intersectoral spillovers brought about by the disruptions of supply chain network in the wake of Great East Japan Earthquake and the declines of domestic production (or production capacity) in some sectors as a result of a deterioration in global competitiveness or the shift to overseas production have contributed to the recent fluctuations of Japan's IP.

JEL Classifications
E23; E32; C32

Keywords
Industrial Production; Structural Factor Analysis; Lehman Shock; Great East Japan Earthquake; Supply Chain Network; Input-output Matrix

The authors are grateful to Kosuke Aoki, Hibiki Ichiue, Michel Juillard, Koichiro Kamada, Mitsuru Katagiri, Marco Lombardi, Eiji Maeda, Makoto Nirei, Shinichi Nishiyama, Kenichi Sakura, Junnosuke Shino, Etsuro Shioji, Tomohiro Sugo, Kozo Ueda, and the participants at 5th ESRI-CEPREMAP Joint Workshop "Applicability of DSGE Model for Policy Analysis," 2013 Japanese Economic Association Annual Spring Meeting, and the seminar at the Bank of Japan for their advice and comments. The views expressed in this paper are those of the authors and do not necessarily reflect the official views of the Bank of Japan.

* Research and Statistics Department (currently, Financial Markets Department)
E-mail : yuusuke.kumano@boj.or.jp
** Research and Statistics Department
E-mail : ichirou.mutou@boj.or.jp
*** Research and Statistics Department
E-mail : akihiro.nakano@boj.or.jp
Notice

Papers in the Bank of Japan Working Paper Series are circulated in order to stimulate discussion and comments. Views expressed are those of authors and do not necessarily reflect those of the Bank.
If you have any comment or question on the working paper series, please contact each author.
When making a copy or reproduction of the content for commercial purposes, please contact the Public Relations Department (post.prd8@boj.or.jp) at the Bank in advance to request permission. When making a copy or reproduction, the source, Bank of Japan Working Paper Series, should explicitly be credited.

distributed by
React to this article
Latest news
Date Title
03:52aDJEuropean Markets on Edge Before Greek Vote
03:51a Standard & Poors upgrades Abengoa's rating
03:50a ENI : Versalis, Ecombine and EVE Rubber Institute to develop innovative green tires via breakthrough technology
03:50a BAOXIN AUTO : Monthly Returns - Monthly Return on Movement of Listed Equity Securiti ...
03:50a EVONIK : launches a new developmental surface-treated titanium dioxide
03:49a Italy service sector growth hits 12-month high in June - PMI
03:48a SYNTHOMER : *numis raises synthomer price target to 325 (290) pence - 'hold'
03:45a MITSUI : Message from the President
03:45a VIKING SUPPLY SHIPS : Release from the extraordinary General Meeting in Viking Supply Ships AB (PUBL)
03:45a KYOWA HAKKO KIRIN : Approval for ACOALAN® in Japan
Latest news
Advertisement
Hot News 
DISTIL : Says Performing Well So Far, With Sales And Volume Growth
ATARI : Last E.T. cartridges up for sale on eBay
UBISENSE : Hit By Contract Delays, To Restructure Operations
RWE : Hrvatska Elektroprivreda to form Joint Venture with RWE
BIJOU BRIGITTE MODISCHE ACCESSOIRES : Hauptversammlung beschließt 3,00 EUR Dividende / Weitere Filialeröffnungen „the P. cookery“
Most Read News
02:35a Aetna to buy Humana for $37 billion in cash and stock
07/02 GOODMAN PROPERTY : Notice of Meeting
07/02 MICROSOFT : Cloud driving business value
07/02 EZRA : Renounceable Underwritten Rights Issue
07/02 Brazil government expects Petrobras to lose key oil rights - source
Most recommended articles
03:52aDJEuropean Markets on Edge Before Greek Vote
03:49a Italy service sector growth hits 12-month high in June - PMI
03:41a Greece makes 3.8 million euro bond coupon payment
03:34a Factbox - What looms for Greece after referendum
03:34a What looms for Greece after referendum