Skip to main content

Measuring Energy-Saving Technical Change in Japan

November 2009
Ichiro Fukunaga*1
Mitsuhiro Osada*2

Click on wp09e05.pdf to download the full text.


In this paper, we estimate time-varying biases of technical change and their effects on productivity using econometric models of aggregate and industry-level technology in Japan. In our aggregate model, the bias of technical change for energy input was energy-saving in the 1980s but gradually switched to energy-using around 2000. We found little evidence that producers switched to energy-saving technical change by the end of 2008 in response to the recent surge in energy prices. As a result, rising energy prices under the energy-using technical change have contributed to a slowdown in TFP growth. Meanwhile, the labor-saving technical change has made large positive contributions to TFP growth and labor productivity growth. In our models of individual industries, the biases of technical change for energy have been small since the 1980s and those for materials have been substantially materials-saving in many industries.

Bias of Technical Change; Productivity;

JEL classification:
E23, O30

  • *1 Research and Statistics Department, Bank of Japan
  • *2 Research and Statistics Department, Bank of Japan
    We are grateful to Dale W. Jorgenson for his valuable comments and encouragement. We also thank Hibiki Ichiue, Seisaku Kameda, Eiji Maeda, Kazuo Monma, Toshitaka Sekine, Etsuro Shioji, and staff at Bank of Japan, for helpful comments and discussions. All remaining errors are our own. Views expressed in this paper are those of the authors and do not reflect those of the Bank of Japan.


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 ( 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.