Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

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

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/25/2013 | 11:22am CET

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
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
01:09p EP ENERGY : with operating profit, sales down in Q1-3
01:09p HYUNDAI HCN : Czech car sales rise by 13 pct to 237,780 units in Jan-Nov
01:09p ISHARES U S SMALL CAP : Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Chapter VI,...
01:08p TRINIDAD CEMENT : FINANCE-Mexico cement giant in takeover bid
01:08p LIQUEFIED NATURAL GAS : Record of Decision and Floodplain Statement of Findings for the Magnolia LNG, LLC Application To Export Liquefied Natural Gas to Non-Free Trade...
01:08p CERTAIN STEEL NAILS FROM MALAYSIA : Preliminary Results of the Changed Circumstances Review
01:08p VIRTU FINANCIAL : Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed...
01:08p BARRACUDA : and High-Tech Bridge Join Efforts to Improve Web Application Security
01:07pDJASIA MARKETS : Asian Stocks Pick Up Speed As Focus Turns 'back To Reflation' Trade
01:06p ATLAS HONDA : Khalid wins Atlas Honda Amateur Golf Crown
Latest news
Advertisement
Hot News 
-32.21%CMC MARKETS : FCA tightens rules for spread betting products
16.28%DRAX : British power producer Drax plans to buy Opus Energy for 340 mln pounds
2.83%SAVILLS : Brexit could delay half of central London commercial property developments - Savills
5.28%German Government Must Compensate Utilities for Nuclear Law, Court Rules -- Update
7.30%NORTHGATE : CEO Contreras to step down
Most Read News
05:57a SAVILLS : Brexit could delay half of central London commercial property developments - Savills
12/05 FORD MOTOR : to raise $2.8 billion debt to fund new technology
05:07a SAMSUNG ELECTRONICS : Group's Lee says to shut group's future strategy office
03:25a AIRBUS : Statoil drops Airbus Super Puma helicopters for good
12/05 MICROSOFT : supports 3rd MITLA Conference On Cloud Computing
Most recommended articles
12/02 Platts considers first addition to Brent basket since 2007
11/30DJCash Crunch Looms Over India's Growth Spurt
07:05aDJCarlyle Consortium Nears Deal to Buy McDonald's China Franchise
06:55aDJFAST FASHION : How a Zara Coat Went From Design to Fifth Avenue in 25 Days
06:48a BMW TO PAY $57 MILLION FOR IRRESPONSIBLE LENDING IN AUSTRALIA : regulator