- Sep. 19, 2018
- Sep. 7, 2018
- Aug. 28, 2018
Home > Research and Studies > Bank of Japan Working Paper Series, Review Series, and Research Laboratory Series > Bank of Japan Working Paper Series 2018 > (Research Paper) Productivity Improvement and Economic Growth
May 10, 2018
This paper summarizes recent discussion on labor productivity which is the source of medium- to long-term economic growth and observes the characteristics of recent productivity developments using relevant statistical data. Furthermore, the paper examines the background of recent Japan's low labor productivity growth and analyzes issues regarding Japan's sustainable growth.
Labor productivity in major advanced countries has been experiencing a slowdown in recent years. This is mainly affected by the slowdown of Total Factor Productivity (TFP). In Japan, there are two reasons behind the slowdown: first, technology and ideas accumulated by research and development (R&D) and management resources such as capital and labor are not utilized efficiently; and second, these resources are not efficiently reallocated among corporations.
In order to improve Japan's productivity in the medium to long-term, it is desirable to encourage the flexible reallocation of management resources such as capital and labor by changing working process at the corporate level in accordance with changes in the socio-economic environment and the advent of new technologies, as well as by improving efficiency in the labor and capital markets.
E20; O30; O47
Productivity; Potential growth; Intangible assets; Resource reallocation
We would like to thank Kosuke Aoki, Hibiki Ichiue, Seisaku Kameda, Ryo Kato, Nobuyuki Kinoshita, Yoichi Matsubayashi, Toshitaka Sekine, Tomohiro Sugo, and Toshinao Yoshiba as well as the staff of the Bank of Japan for their helpful comments. We also thank Wakako Kaku for assisting the data compilation as well as Chikako Wakasa and Lisa Uemae for helping with English translation. The opinions expressed here, as well as any remaining errors, are those of the authors and should not be ascribed to 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 (email@example.com) 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.