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

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 CEST

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
React to this article
Latest news
Date Title
12:08p ALCOA INC. : Regulation FD Disclosure (form 8-K)
12:08p ADAIAH DISTRIBUTION INC : Other Events (form 8-K)
12:07p CASBAA SATELLITE INDUSTRY FORUM 2016 : Seizing New Growth Opportunities Amidst Technological and Economic Changes
12:07p ENTRAVISION COMMUNICATIONS CORP : Submission of Matters to a Vote of Security Holders (form 8-K)
12:07p FNB BANCORP/CA/ : Change in Directors or Principal Officers, Financial Statements and Exhibits (form 8-K)
12:07p PRESBIA PLC : Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)
12:07p DORIAN LPG : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-K)
12:07p KIBO MINING : Issues Shares In Settlement Of Invoices (ALLISS)
12:07p IJM DEALINGS DISCLOSURE : Dato' Khor Kiem Teoh
12:07p ME : Instant issuance security ‘overcoming’ mobile banking growth
Latest news
Advertisement
Hot News 
MATICA TECHNOLOGIES : launches S3200 printer for financial flat card issuance
HARBOURVEST HVGPE : HVPE Announces Audited Results for Year Ended 31 January 2016
MINCO : Swings To First-Quarter Loss On Foreign Exchange Loss
PROTON POWER SYSTEMS : Wins Seven-Year Fuel Cell Deal In Germany
EVGEN PHARMA : Pleased With "Significant Progress" Since AIM Listing
Most Read News
05:14a Brent crude lower on strong Middle East oil output
05/30 MOPHIE : expands wireless charging line with new ecosystem for leading mobile devices
Most recommended articles
06:07a Global glut to temper oil price gains this year - Reuters poll
06:01aDJTOKYO ELECTRIC POWER : Tepco Affiliate in Talks to Buy Stake in Petronas's LNG Assets
06:00a Silver Prices Testing Support, Trend Lower Remains Strong
05:55aDJBOEING : Airbus Ponders How to Blunt Boeing Range Advantage
05:46aDJJazz Pharmaceuticals Agrees to Buy Celator for About $1.5 Billion