Member access

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
Recommend:
0

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
Recommend :
0
React to this article
Latest news
Date Title
<1m ago DISCOVERY AIR : announces non-cash impairment charges affecting fiscal year 2014
1m ago GRUPO AEROPORTUARIO DEL PACIFICO B : de C.V. Announces Resolutions Adopted at Annual General Ordinary and Extraordinary Shareholders’ Meeting on April 23, 2014
2m ago ELON MUSK : Tesla's Musk paid $70,000 in 2013, but could rake in much more if goals are met
2m ago EASTMAN CHEMICAL : 2014, Apr 24 - Eastman Announces First-Quarter 2014 Financial Results
2m ago BALLARD POWER SYSTEMS : Closes Strategic Intellectual Property Transaction with United Technologies Corp. read more
2m ago MGM RESORTS : Appoints Anton Nikodemus to Chief Operating Officer of Regional Operations as Company Grows in U.S.
2m ago VERIZON COMMUNICATIONS : Create, Grow, Sustain: How Companies Are Doing Well by Doing Good
2m ago VERIZON COMMUNICATIONS : Reports Fifth Consecutive Quarter of Double-Digit Operating Income and Earnings Growth
2m ago VERIZON COMMUNICATIONS : Brings Together Thousands of Employees Throughout the Business for Company’s Annual Global Women’s Summit
2m ago RAYTHEON : tackles nation's STEM workforce challenge during "STEM Week" in Washington, D.C.
Latest news
Advertisement
Hot News 
SERVICEPOWER TECHNOLOGIES : Forms Strategic Relationship with Bosch
GREETINGS : Says Full-Year In Line With Expectations
Eagle Rock Announces Suspension of Distribution, Intent to Resume Following Close of Midstream Contribution Transaction
Elizabeth Arden Hires Goldman Sachs to Assist in Possible Sale -Reuters
CLEARFIELD : Reports Fiscal 2014 2nd Quarter Results
Most Read News
17m ago MARLIN BUSINESS SERVICES : Announces Its First Quarter 2014 Earnings Conference Call and Webcast
15m ago EDISON : Linda Stuntz Joins Edison International and Southern California Edison’s Boards of Directors
17m ago SUNCOKE ENERGY : Partners, L.P. : Announces Pricing of Public Offering of Common Units
18m ago UNITED COMMUNITY BANCORP : Announces Cash Dividend
18m ago RE/MAX : Continues Worldwide Growth
Most recommended articles
14h ago Juicy Apple buoys shares, euro volatility sinks
6h ago Healthcare deal hopes push FTSE to seven-week closing high
2d ago Barclays joins retreat from commodities as new rules bite
04/17 BLACKSTONE : earnings rise 30 percent, boosted by private equity gains
19m ago AMAZON : CFO: first-quarter unit sales growth slowed from previous quarter
Dynamic quotes  
ON
| OFF