Federal Open Market Committee Leaves Fed Funds Rate at 0 to ¼ Percent Per Year Probably Until 2023, Stable US Dollar With Revaluing Yuan, Growth of US Manufacturing at 1.0 Percent in Aug 2020, US Manufacturing 7.0 Lower Than A Year Earlier In the Global Recession, with Output in the US Reaching a High in Feb 2020 (https://www.nber.org/cycles.html), in the Lockdown of Economic Activity in the COVID-19 Event, US Manufacturing Underperforming Below Trend in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, Squeeze of Economic Activity by Carry Trades Induced by Zero Interest Rates, Continuing Recovery of US Economic Indicators, World Cyclical Slow Growth, and Government Intervention in Globalization: Part VI

 

Carlos M. Pelaez

 

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.

 

I United States Industrial Production

IIB Squeeze of Economic Activity by Carry Trades Induced by Zero Interest Rates

III World Financial Turbulence

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

IIID Appendix on European Central Bank Large Scale Lender of Last Resort

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

 

 

VB Japan. The GDP of Japan grew at 1.0 percent per year on average from 1991 to 2002, with the GDP implicit deflator falling at 0.8 percent per year on average. The average growth rate of Japan’s GDP was 4 percent per year on average from the middle of the 1970s to 1992 (Ito 2004). Low growth in Japan in the 1990s is commonly labeled as “the lost decade” (see Pelaez and Pelaez, The Global Recession Risk (2007), 81-115). Table VB-GDP provides annual growth rates of Japan’s GDP from 1995 to 2019. Growth weakened from 2.7 per cent in 1995 and 3.1 percent in 1996 to contractions of 1.1 percent in 1998 and 0.3 percent in 1999. Growth rates were below 2 percent with exception of 2.8 percent in 2000 and 2.2 percent in 2004. Japan’s GDP contracted sharply by 1.1 percent in 2008 and 5.4 percent in 2009. As in most advanced economies, growth was robust at 4.2 percent in 2010 but mediocre at minus 0.1 percent in 2011 because of the tsunami and 1.5 percent in 2012. Japan’s GDP grew 2.0 percent in 2013 and nearly stagnated in 2014 at 0.4 percent. The GDP of Japan increased 1.2 percent in 2015 and 0.5 percent in 2016. Japan’s GDP increased at 2.2 percent in 2017. The GDP of Japan increased 0.3 percent in 2018. The GDP of Japan increased 0.7 percent in 2019. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). Japan’s real GDP in calendar year 2019 is 6.2 percent higher than in calendar year 2007 for growth at the average yearly rate of 0.5 percent. Japan’s real GDP grew 13.5 percent from the trough of 2009 to 2019 at the average yearly rate of 1.3 percent (https://www.cao.go.jp/index-e.html).

Table VB-GDP, Japan, Yearly Percentage Change of GDP ∆%

Calendar Year	∆%
1995	2.7
1996	3.1
1997	1.1
1998	-1.1
1999	-0.3
2000	2.8
2001	0.4
2002	0.1
2003	1.5
2004	2.2
2005	1.7
2006	1.4
2007	1.7
2008	-1.1
2009	-5.4
2010	4.2
2011	-0.1
2012	1.5
2013	2.0
2014	0.4
2015	1.2
2016	0.5
2017	2.2
2018	0.3
2019	0.7

Source: Source: Japan Economic and Social Research Institute, Cabinet Office

https://www.cao.go.jp/index-e.html

http://wwwa.cao.go.jp/notice/20191101notice.html

 

Japan’s economy grew 1.0 percent in IQ2014, seasonally adjusted, partly because of anticipation of purchases to avoid the increase in the tax on value added of consumption in Apr 2014, contracting 1.9 percent in IIQ2014, as shown in Table VB-1, incorporating the latest estimates and revisions. Japan’s GDP changed 0.1 percent in IIIQ2014 and grew 0.5 percent in IVQ2014. The GDP of Japan increased 1.4 percent in IQ2015 and increased 0.1

 percent in IIQ2015. The GDP of Japan decreased 0.1 percent in IIIQ2015. Japan’s GDP contracted 0.4 percent in IVQ2015. The GDP of Japan increased 0.5 percent in IQ2016 and increased 0.1 percent in IIQ2016. Japan’s GDP increased 0.2 percent in IIIQ2016. The GDP of Japan increased 0.3 percent in IVQ2016, increasing 1.2 percent in IQ2017. Japan’s GDP increased 0.3 percent in IIQ2017 and increased 0.6 percent in IIIQ2017. The GDP of Japan increased 0.5 percent in IVQ2017. Japan’s GDP contracted 0.4 percent in IQ2018 and increased 0.4 percent in IIQ2018. Japan’s GDP contracted 0.8 percent in IIIQ2018. Japan’s GDP increased 0.6 percent in IVQ2018. Japan’s GDP increased 0.7 percent in IQ2019 and increased 0.4 percent in IIQ2019. Japan’s GDP changed 0.0 percent in IIIQ2019. Japan’s GDP contracted 1.8

 percent in IVQ2019 and contracted 0.6 percent in IQ2020. Japan’s GDP contracted 7.9 percent in IIQ2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event. The GDP of Japan changed 0.0 percent in IVQ2013 after growing 0.8 percent in IIIQ2013, 0.8 percent in IIQ2013 and 1.2 percent in IQ2013. Japan’s GDP increased 0.3 percent in IVQ2012 relative to IIIQ2012. GDP growth in IQ2012 was revised to 1.2 percent; IIQ2012 GDP growth was revised to minus 0.7 percent; and IIIQ2012 growth was revised to minus 0.4 percent. The economy of Japan had already weakened in IVQ2010 when GDP fell revised 0.8 percent. As in other advanced economies, Japan’s recovery from the global recession has not been robust. GDP fell 1.4 percent in IQ2011 and fell again 0.7 percent in IIQ2011 because of the disruption of the tragic Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Recovery was robust in the first two quarters of 2010 but GDP grew at 1.8 percent in IIIQ2010 and fell 0.8 percent in IVQ2010. The deepest quarterly contractions in the global recession were 2.4 percent in IVQ2008 and 4.8 percent in IQ2009. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). Using seasonally adjusted and price adjusted data (https://www.cao.go.jp/index-e.html), Japan’s GDP fell 8.6 percent from the pre-downturn peak of ¥506,835.3 million in IQ2008 to the lowest reading of ¥463,259.4 million in IQ2009. Japan’s GDP decreased 4.3 percent from the pre-downturn peak of ¥506,835.3 million in IQ2008 to ¥484,837.8 million in IIQ2020 at the annual equivalent rate of minus 0.4 percent. GDP in Japan grew 4.7 percent from IIQ2009 to IIQ2020 at the annual equivalent rate of 0.4 percent, using the latest revision (https://www.cao.go.jp/index-e.html). The Economic and Social Research Institute (ESRI) of the Cabinet Office of Japan revised the national accounts of Japan following the international standard of the national accounts. ESRI also changed the benchmark reference year from 2005 to 2011 (http://www.esri.cao.go.jp/en/sna/data/kakuhou/files/2015/pdf/20160930_2008sna.pdf http://www.esri.cao.go.jp/en/sna/data/sokuhou/files/2016/qe163_2/pdf/note_e.pdf). ESRI revised GDP since 1994 (http://www.esri.cao.go.jp/en/sna/data/sokuhou/files/2017/qe173_2/gdemenuea.html http://www.esri.cao.go.jp/en/sna/data/sokuhou/files/2017/qe173_2/pdf/note_e.pdf).

Table VB-1, Japan, Real GDP ∆% Changes from the Previous Quarter Seasonally Adjusted ∆%

	IQ	IIQ	IIIQ	IVQ
2020	-0.6	-7.9
2019	0.7	0.4	0.0	-1.8
2018	-0.4	0.4	-0.8	0.6
2017	1.2	0.3	0.6	0.5
2016	0.5	0.1	0.2	0.3
2015	1.4	0.1	-0.1	-0.4
2014	1.0	-1.9	0.1	0.5
2013	1.2	0.8	0.8	0.0
2012	1.2	-0.7	-0.4	0.3
2011	-1.4	-0.7	2.5	-0.2
2010	0.9	1.4	1.8	-0.8
2009	-4.8	2.1	0.1	1.4
2008	0.3	-0.4	-1.2	-2.4
2007	0.7	0.1	-0.5	0.5
2006	0.2	0.2	-0.2	1.3
2005	0.5	0.7	1.0	0.2
2004	0.7	0.0	0.6	-0.2
2003	0.1	0.6	0.4	1.1
2002	0.2	0.7	0.3	0.3
2001	0.5	-0.5	-1.0	-0.3
2000	1.8	0.3	0.1	1.0
1999	-1.3	0.3	0.6	0.1
1998	-1.1	-0.4	0.2	0.8
1997	0.3	-0.7	0.2	0.0

Source: Japan Economic and Social Research Institute, Cabinet Office

https://www.cao.go.jp/index-e.html

http://wwwa.cao.go.jp/notice/20191101notice.html

Japan’s GDP contracted at 28.1 percent in IIQ2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event, with deductions of 15.6 percent by personal consumption expenditures (PC), 10.9 percent by Net trade (Trade), 2.8 percent by Gross Fixed Capital Formation (GFCF) and 0.4 percent by Government Expenditure (GOVC). Private Inventory Investment (PINV) added 1.4 percent. Japan’s GDP contracted at 2.3 percent in IQ2020 with deductions of 1.6 percent by personal consumption expenditures (PC), 0.9 percent by Net trade (Trade) and 0.3 percent by private inventory investment (PINV). Government expenditure (GOVC) contributed 0.0 percent and Gross Fixed Capital Formation (GFCF) added 0.5 percent. Japan’s GDP contracted at 7.0 percent in IVQ2019 with contributions of 2.1 percent by Net trade (Trade), 0.3 percent by government expenditure (GOVC) and 0.1 percent by private inventory investment (PINV).  Personal consumption expenditures (PC) deducted 6.3 percent and Gross Fixed Capital Formation (GFCF subtracted 3.2 percent. Japan’s GDP grew at 0.2 percent in IIIIQ2019 with contributions of 0.5 percent by Gross Fixed Capital Formation (GFCF) and 0.7 percent by government expenditure (GOVC).  Net trade (Trade) deducted 1.0 percent and private inventory investment (PINV) subtracted 1.0 percent. Personal consumption expenditures (PC) contributed 1.0 percent. The GDP of Japan grew at 1.6 percent in IIQ2019 with contributions of 0.8 percent by Gross Fixed Capital Formation (GFCF) and 1.2 percent by Personal consumption expenditures (PCE). Government expenditure (GOVC) contributed 0.8 percent. Net trade deducted 1.2 percent and private inventory investment (PINV) subtracted 0.0 percent.

Japan’s GDP grew at 2.8 percent in IQ2019 with contributions of 0.4 percent by Gross Fixed Capital Formation (GFCF) and 2.1 percent by net trade (Trade). Government expenditure (GOVC) contributed 0.1 percent and private inventory investment (PINV) added 0.2 percent. Personal consumption expenditures (PC) contributed 0.2 percent.  Japan’s GDP grew at 2.3 percent in IVQ2018 with contributions of 0.5 percent by government expenditures (GOVC) and 0.9 percent by personal consumption expenditures (PC). Gross Fixed Capital Formation (GFCF) contributed 2.8 percent and private inventory investment (PINV) added 0.1 percent. Net Trade deducted 2.0 percentage points. The GDP of Japan contracted at minus 3.2 percent in IIIQ2018 with contribution of 0.2 percent by government expenditures (GOVC).  Personal consumption (PC) deducted 0.5 percentage points and gross fixed capital formation (GFCF) deducted 3.2 percentage points. Net trade (Trade) deducted 0.7 percentage points and inventory investment (PINV) contributed 1.0 percentage points. The GDP of Japan grew at 1.5 percent in IIQ2018 with contributions of 0.5 percent by personal consumption (PC) and 1.5 percent by gross fixed capital formation (GFCF). Net trade (Trade) contributed 0.0 percentage points, inventory investment (PINV) deducted 0.3 percentage points and government expenditures (GOVC) deducted 0.2 percentage points.  Japan’s GDP contracted at 1.7 percent in IQ2018 with contributions of 0.3 percent by Net Trade (Trade), 0.6 percent by government expenditures (GOVC) and minus 0.8 percent by personal consumption expenditures (PC). Gross Fixed Capital Formation (GFCF) deducted 0.2 percent and private inventory divestment (PINV) deducted 1.5 percent. The GDP of Japan grew at 1.9 percent in IVQ2017 with contributions of 1.1 percent by personal consumption (PC) and 0.6 percent by gross fixed capital formation (GFCF). Net trade (Trade) deducted 0.3 percentage points, inventory investment (PINV) contributed 0.4 percentage points and government expenditures (GOVC) contributed 0.1 percentage points.  Japan’s GDP grew at 2.3 percent in IIIQ2017 with Net Trade (Trade) contributing 2.1 percentage points and inventory investment (PINV) adding 1.9 percentage points. Private consumption (PC) deducted 1.4 percentage points. Gross Fixed Capital Formation (GFCF) deducted 0.4 percentage points and government consumption (GOVC) contributed 0.2 percentage points. The GDP of Japan grew at 1.2 percent in IIQ2017 with contributions of 1.5 percent by personal consumption (PC), 1.3 percent by gross fixed capital formation (GFCF) and minus 0.4 percent by government expenditures (GOV). Net trade (Trade) deducted 0.9 percentage points and inventory divestment (PINV) subtracted 0.4 percentage points. The GDP of Japan grew at 4.8 percent in IQ2017 with contributions of 1.3 percent of gross fixed capital formation (GFCF), 0.4 percent of net exports (Trade) and 0.5 percent of government consumption (GOVC). Inventory investment (PINV) contributed 0.9 percent and personal consumption (PC) contributed 1.9 percent.  The GDP of Japan grew at 1.2 percent in IVQ2016 with contributions of 0.7 percent of gross fixed capital formation (GFCF), 1.5 percent of net exports (Trade) and deduction of 0.1 percent of government consumption (GOVC). Inventory divestment (PINV) deducted 0.9 percent and personal consumption (PC) contributed 0.1 percent. Japan’s GDP grew at 0.9 percent in IIIQ2016 with contributions of 1.2 percent of personal consumption expenditures (PC), 1.2 percent of net trade (Trade) and 0.2 percent of government consumption expenditures (GOVC). Inventory divestment (PINV) deducted 1.9 percent and gross capital formation (GFCF) contributed 0.1 percent. The GDP of Japan grew at 0.5 percent in IIQ2016 with deduction of 1.2 percent by personal consumption expenditures. Gross fixed capital formation (GFCF) contributed 0.2 percent and government consumption expenditures (GOVC) deducted 0.8 percent. Net trade (Trade) added 0.5 percent and change of private inventories (PINV) added 1.8 percent. Japan’s GDP grew at 2.1 percent in IQ2016 with contributions of 0.3 percent by personal consumption, 1.4 percent by trade and 1.0 percent by government. Gross fixed capital formation deducted 0.4 percent. The GDP of Japan grew at minus 1.5 percent in IVQ2015 with deduction of 1.5 percent by personal consumption (PC) expenditures and deduction of 0.4 percent by private inventories (PINV). Net trade contributed 0.1 percent and gross fixed capital formation deducted 0.4 percent. GDP grew at minus 0.2 percent in IIIQ2015 with contributions of 0.8 percent by personal consumption expenditures and 0.2 percentage points by government consumption. Net trade deducted 0.6 percent. Gross Fixed Capital Formation contributed 0.4 percentage points and inventory divestment deducted 1.1 percentage points. GDP grew at 0.4 percent in IIQ2015 with contribution of 0.0 percent by personal consumption expenditures and deduction of 0.5 percent of net exports. Goss fixed capital formation deducted 0.9 percentage points; government consumption expenditures contributed 0.0 percentage points; and inventory investment added 1.9 percentage points. GDP grew at 5.6 percent in IQ2015 with contributions of 1.2 percentage points by personal consumption expenditures, 2.3 percent by gross fixed capital formation and increase in inventory investment at 1.1 percent. Government expenditures increased at 0.7 percent while trade contributed 0.2 percentage points. GDP expanded at 2.0 percent in IVQ2014 with contribution of 0.6 percent by personal consumption expenditures, 1.5 percent by net trade and 0.2 percent by government consumption expenditures. Gross fixed capital formation added 0.9 percent and private inventory divestment deducted 1.0 percent.  Japan grew at 0.4 percent in IIIQ2014 with contributions of 0.2 percentage points of GFCF and 1.7 percentage points by personal consumptions expenditure but deduction of 1.7 percentage points of inventory divestment. Traded deducted 0.3 percentage points and government added 0.3 percent. Japan’s GDP contracted at 7.5 percent in IIQ2014 with deductions of 11.4 percent by personal consumption and 3.5 percent by gross fixed capital formation. Trade added 4.0 percentage points and government expenditures deducted 0.4 percent. Inventory investment added 3.9 percent. The GDP of Japan expanded at 4.0 percent in IQ2014 with contributions of 4.7 percent by personal consumption and 1.6 percent of gross fixed capital formation. There were deductions of 0.7 percent by trade and 1.8 percent by inventory divestment. Government expenditures contributed 0.2 percent. The GDP of Japan decreased at 0.1 percent annual equivalent in IVQ2013 with deduction of personal consumption expenditures of 0.2 percent and growth of GFCF at 1.8 percent. Trade deducted 2.2 percentage points. Japan grew at 3.4 percent in IIIQ2013 with contribution of 1.0 percentage points by personal consumption and 2.7 percentage points by GFCF. Trade deducted 1.3 percentage points. Japan grew at 3.1 percent SAAR in IIQ2013 driven by contribution of 1.9 percent of personal consumption, deduction of 0.1 percent of net trade and contribution of gross fixed capital formation at 2.7 percent. In IQ2013, Japan’s GDP increased at the SAAR of 5.0 percent in large part because of 3.1 percent in personal consumption and 1.5 percent in trade. The SAAR of GDP in IVQ2012 was 1.1 percent: 1.1 percentage points from growth of personal consumption expenditures less 0.4 percentage points of net trade (exports less imports) less 0.2 percentage points of private inventory investment (PINV) plus 0.5 percentage points of government consumption and 0.1 percentage points of gross fixed capital formation. The SAAR of GDP in IIIQ2011 was revised to a high 10.3 percent. Net trade deducted from GDP growth in three quarters of 2011 and provided the growth impulse of 3.6 percentage points in IIIQ2011. Growth in 2011 and IQ2012 was driven by personal consumption expenditures that deducted 0.3 percentage points from GDP growth in IIIQ2012 but contributed 1.1 percentage points to GDP growth in IVQ2012.

Table VB-2, Japan, Contributions to Changes in Real GDP, Seasonally Adjusted Annual Rates (SAAR), %

	GDP	PC	GFCF	Trade	PINV	GOVC
2020
I	-2.3	-1.6	0.5	-0.9	-0.3	0.0
IIQ	-28.1	-15.6	-2.8	-10.9	1.4	-0.4
2019
I	2.8	0.2	0.4	2.1	0.2	0.1
II	1.6	1.2	0.8	-1.2	0.0	0.8
III	0.2	1.0	0.5	-1.0	-1.0	0.7
IV	-7.0	-6.3	-3.2	2.1	0.1	0.3
2018
I	-1.7	-0.8	-0.2	0.3	-1.5	0.6
II	1.5	0.5	1.5	0.0	-0.3	-0.2
III	-3.2	-0.5	-3.2	-0.7	1.0	0.2
IV	2.3	0.9	2.8	-2.0	0.1	0.5
2017
I	4.8	1.9	1.3	0.4	0.9	0.5
II	1.2	1.5	1.3	-0.9	-0.4	-0.4
III	2.3	-1.4	-0.4	2.1	1.9	0.2
IV	1.9	1.1	0.6	-0.3	0.4	0.1
2016
I	2.1	0.3	-0.4	1.4	-0.3	1.0
II	0.5	-1.2	0.2	0.5	1.8	-0.8
III	0.9	1.2	0.1	1.2	-1.9	0.2
IV	1.2	0.1	0.7	1.5	-0.9	-0.1
2015
I	5.6	1.2	2.3	0.2	1.1	0.7
II	0.4	0.0	-0.9	-0.5	1.9	0.0
III	-0.2	0.8	0.4	-0.6	-1.1	0.2
IV	-1.5	-1.5	-0.4	0.1	-0.4	0.7
2014
I	4.0	4.7	1.6	-0.7	-1.8	0.2
II	-7.5	-11.4	-3.5	4.0	3.9	-0.4
III	0.4	1.7	0.2	-0.3	-1.7	0.3
IV	2.0	0.6	0.9	1.5	-1.0	0.2
2013
I	5.0	3.1	0.7	1.5	-0.1	0.0
II	3.1	1.9	2.7	-0.1	-2.4	1.0
III	3.4	1.0	2.7	-1.3	1.0	0.0
IV	-0.1	-0.2	1.8	-2.2	0.4	0.1
2012
I	4.9	1.0	0.9	0.8	1.2	0.9
II	-2.9	0.4	0.6	-2.0	-1.8	-0.3
III	-1.5	-0.3	-0.6	-1.9	1.0	0.3
IV	1.1	1.1	0.1	-0.4	-0.2	0.5
2011
I	-5.5	-4.2	0.6	-1.3	-1.1	0.4
II	-2.6	2.1	-0.5	-4.3	-0.2	0.3
III	10.3	3.7	1.5	3.6	1.1	0.3
IV	-0.6	1.2	1.7	-2.8	-0.8	0.2
2010
I	3.5	0.3	0.6	2.0	1.3	-0.8
II	5.5	2.3	-0.2	0.3	2.0	1.2
III	7.4	3.2	0.7	0.7	2.6	0.3
IV	-3.2	-3.1	-0.3	-0.2	0.0	0.3
2009
I	-17.8	-1.0	-4.3	-4.7	-8.3	0.2
II	8.6	2.6	-1.7	7.5	-1.1	1.1
III	0.2	1.6	-2.7	2.2	-1.8	0.9
IV	5.6	1.7	-0.6	2.8	1.3	0.4
2008
I	1.0	0.9	0.5	0.8	-1.3	0.1
II	-1.5	-2.2	-1.1	0.4	2.4	-0.9
III	-4.9	-0.7	-0.6	0.0	-3.5	0.0
IV	-9.4	-3.3	-2.4	-10.4	6.3	0.3
2007
I	3.0	0.4	-0.2	1.0	1.3	0.4
II	0.5	1.4	-1.4	0.7	-1.0	0.5
III	-1.9	-2.1	-2.4	2.3	0.5	-0.1
IV	1.9	0.5	-1.3	1.2	1.0	0.5

Note: PC: Private Consumption; GFCF: Gross Fixed Capital Formation; PINV: Private Inventory; Trade: Net Exports; GOVC: Government Consumption

Source: Japan Economic and Social Research Institute, Cabinet Office

https://www.cao.go.jp/index-e.html

http://wwwa.cao.go.jp/notice/20191101notice.html

Long-term economic growth in Japan significantly improved by increasing competitiveness in world markets. Net trade of exports and imports is an important component of the GDP accounts of Japan. Table VB-3 provides quarterly data for net trade, exports and imports of Japan. Net trade had strong positive contributions to GDP growth in Japan in all quarters from IQ2007 to IIQ2009 with exception of IVQ2008, IIIQ2008 and IQ2009. The US recession is dated by the National Bureau of Economic Research (NBER) as beginning in IVQ2007 (Dec) and ending in IIQ2009 (Jun) (https://www.nber.org/cycles.html). Net trade contributions helped to cushion the economy of Japan from the global recession. Net trade deducted from GDP growth in six of the nine quarters from IVQ2010 to IQ2012. The only strong contribution of net trade was 3.6 percent in IIIQ2011. Net trade added 0.8 percent in IQ2012, deducting 2.0 percent in IIQ2012. Net trade deducted 1.9 percent in IIIQ2012. Net traded deducted 0.4 percent in IVQ2012. Net trade added 1.5 percentage points to GDP growth in IQ2013 but deducted 0.1 percentage points in IIQ2013, deducting 1.3 percentage points in IIIQ2013 and 2.2 percentage points in IVQ2013. Net trade deducted 0.7 percentage points from GDP growth in IQ2014. Net trade added 4.0 percentage points to GDP growth in IIQ2014 and deducted 0.3 percentage points in IIIQ2014. Net trade added 1.5 percentage points to GDP growth in IVQ2014. Net trade contributed 0.2 percentage points to GDP growth in IQ2015 and deducted 0.5-percentage points in IIQ2015. Net trade deducted 0.6 percentage points from GDP growth in IIIQ2015. Net trade contributed 0.1 percentage points to GDP growth in IVQ2015 and added 1.4 percentage points in IQ2016. Net trade contributed 0.5 percentage points to GDP growth in IIQ2016. Net trade added 1.2 percentage points to GDP growth in IIIQ2016 and contributed 1.5 percentage points in IVQ2016.  Net trade contributed 0.4 percentage points to GDP growth in IQ2017 and deducted 0.9 percentage points in IIQ2017. Net trade contributed 2.1 percentage points to GDP growth in IIIQ2017 and deducted 0.3 percentage-point in IVQ2017. Net trade contributed 0.3 percentage points to GDP growth in IQ2018 and contributed 0.0 percentage points in IIQ2018. Net trade deducted 0.7 percentage points from GDP growth in IIIQ2018 and deducted 2.0 percentage points in IVQ2018. Net trade contributed 2.1 percentage points to GDP growth in IQ2019 with export contraction deducting 1.3 percent and import contraction contributing 3.4 percent. Net trade deducted 1.2 percentage points from GDP growth in IIQ2019. Net trade deducted 1.0 percentage points from GDP growth in IIIQ2019. Net trade contributed 2.1 percentage points to GDP growth in IVQ2019 mostly by 1.8 percentage points of import contraction. Net trade deducted 0.9 percentage points from GDP growth in IQ2020 with exports deducting 3.8 percent and import contraction adding 2.9 percentage points. Net trade deducted 10.9 percentage points from GDP growth in IIQ2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event, with exports deducting 11.3 percent and import contraction adding 0.4 percent  Private consumption assumed the role of driver of Japan’s economic growth but should moderate as in most mature economies.

Table VB-3, Japan, Contributions to Changes in Real GDP, Seasonally Adjusted Annual Rates (SAAR), %

	Net Trade	Exports	Imports
2020
I	-0.9	-3.8	2.9
II	-10.9	-11.3	0.4
2019
I	2.1	-1.3	3.4
II	-1.2	0.1	-1.3
III	-1.0	-0.5	-0.5
IV	2.1	0.3	1.8
2018
I	0.3	0.8	-0.5
II	0.0	0.6	-0.6
III	-0.7	-1.7	1.0
IV	-2.0	1.2	-3.2
2017
I	0.4	1.5	-1.1
II	-0.9	0.0	-0.9
III	2.1	1.4	0.7
IV	-0.3	1.4	-1.7
2016
I	1.4	0.5	0.9
II	0.5	-0.4	0.9
III	1.2	1.5	-0.3
IV	1.5	1.9	-0.4
2015
I	0.2	0.9	-0.8
II	-0.5	-2.5	1.9
III	-0.6	1.7	-2.3
IV	0.1	-0.6	0.7
2014
I	-0.7	3.9	-4.6
II	4.0	0.8	3.1
III	-0.3	1.1	-1.3
IV	1.5	2.1	-0.6
2013
I	1.5	1.8	-0.3
II	-0.1	1.9	-2.1
III	-1.3	0.0	-1.3
IV	-2.2	-0.3	-2.0
2012
I	0.8	1.9	-1.1
II	-2.0	-0.6	-1.4
III	-1.9	-2.2	0.2
IV	-0.4	-2.0	1.6
2011
I	-1.3	-0.5	-0.8
II	-4.3	-4.6	0.4
III	3.6	5.5	-1.8
IV	-2.8	-1.7	-1.1
2010
I	2.0	3.3	-1.3
II	0.3	2.8	-2.5
III	0.7	1.7	-1.0
IV	-0.2	0.2	-0.4
2009
I	-4.7	-16.2	11.5
II	7.5	4.6	2.9
III	2.2	5.3	-3.1
IV	2.8	4.2	-1.4
2008
I	0.8	1.8	-1.0
II	0.4	-1.5	1.9
III	0.0	0.1	-0.2
IV	-10.4	-9.2	-1.2
2007
I	1.0	1.6	-0.5
II	0.7	1.5	-0.8
III	2.3	1.7	0.5
IV	1.2	2.0	-0.8

Source: Japan Economic and Social Research Institute, Cabinet Office

https://www.cao.go.jp/index-e.html

http://wwwa.cao.go.jp/notice/20191101notice.html

Japan’s percentage growth of GDP not seasonally adjusted in a quarter relative to the same quarter a year earlier is in in Table VB-4. Contraction of GDP in a quarter relative to the same quarter a year earlier extended over seven quarters from IIQ2008 through IVQ2009. Contraction was sharpest in IQ2009 with output declining 8.8 percent relative to a year earlier. Yearly quarterly rates of growth of Japan were relatively high for a mature economy through the decade except for the contractions from IVQ2001 to IIQ2002 and after 2007. The Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 caused slower GDP in IQ2011 at 0.8 percent relative to the same quarter a year earlier and decline of 1.0 percent in IIQ2011. GDP fell 0.4 percent in IIIQ2011 relative to a year earlier and increased 0.1 percent in IVQ2011 relative to a year earlier. Growth resumed with 3.1 percent in IQ2012 relative to a year earlier. Growth of 2.9 percent in IIQ2012 is largely caused by the low level in IIQ2011 resulting from the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. GDP decreased 0.1 percent in IIIQ2012 relative to a year earlier and increased 0.3 percent in IVQ2012 relative to a year earlier. GDP increased 0.4 percent in IQ2013 relative to a year earlier and 1.9 percent in IIQ2013. Growth of 3.0 percent in IIIQ2013 relative to a year earlier is partly due to the decline of 0.4 percent in GDP in IIIQ2012.  GDP increased 2.7 percent in IVQ2013 relative to a year earlier. The GDP of Japan increased 3.0 percent in IQ2014 relative to a year earlier. Japan’s GDP contracted 0.1 percent in IIQ2014 relative to a year earlier. GDP contracted 0.9 percent in IIIQ2014 relative to a year earlier. Japan’s GDP contracted 0.5 percent in IVQ2014 relative to a year earlier. GDP changed 0.0 percent relative to a year earlier in IQ2015 and increased 2.2 percent in IIQ2015 relative to a year earlier. GDP increased 1.9 percent in IIIQ2015 relative to a year earlier. GDP increased 0.9 percent in IVQ2015 relative to a year earlier. GDP increased 0.2 percent in IQ2016 relative to a year earlier. GDP increased 0.2 percent in IIQ2016 relative to a year earlier. The GDP of Japan increased 0.5 percent in IIIQ2016 relative to a year earlier. In IVQ2016, Japan’s GDP increased 1.2 percent relative to a year earlier. Japan’s GDP increased 1.8 percent in IQ2017 relative to a year earlier. In IIQ2017, Japan’s GDP increased 1.9 percent relative to a year earlier. The GDP of Japan increased 2.4 percent in IIIQ2017 relative to a year earlier. Japan’s GDP increased 2.5 percent in IVQ2017 relative to a year earlier. In IQ2018, the GDP of Japan increased 0.9 percent relative to a year earlier. Japan’s GDP increased 1.0 percent in IIQ2018 relative to a year earlier and decreased 0.3 percent in IIIQ2018 relative to a year earlier. The GDP of Japan decreased 0.4 percent in IVQ2018 relative to a year earlier, increasing 0.8 percent in IQ2019 relative to a year earlier. Japan’s GDP increased 0.9 percent in IIQ2019 relative to a year earlier. The GDP of Japan increased 1.7 percent in IIIQ2019 relative to a year earlier. Japan’s GDP fell 0.7 percent in IVQ2019 relative to a year earlier. The GDP of Japan decreased 1.8 percent in IQ2020 relative to a year earlier. Japan’s GDP fell 9.9 percent in IIQ2020 relative to a year earlier in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event. Japan faces the challenge of recovery from the devastation of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 in an environment of declining world trade and bouts of risk aversion that cause appreciation of the Japanese yen, eroding the country’s competitiveness in world markets. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977).  Using price adjusted but not seasonally adjusted data (https://www.cao.go.jp/index-e.html), Japan’s GDP contracted 11.4 percent from the high in IVQ2007 to the low in IIQ2009. GDP decreased 8.7 percent from IVQ2007 to IIQ2020 at the annual equivalent rate of minus 0.7 percent. Japan’s GDP grew 3.1 percent from IIIQ2009 to IIQ2020 at the annual equivalent rate of 0.3 percent.

Table VB-4, Japan, Real GDP ∆% Changes from Same Quarter Year Earlier, NSA ∆%

	IQ	IIQ	IIIQ	IVQ
2020	-1.8	-9.9
2019	0.8	0.9	1.7	-0.7
2018	0.9	1.0	-0.3	-0.4
2017	1.8	1.9	2.4	2.5
2016	0.2	0.2	0.5	1.2
2015	0.0	2.2	1.9	0.9
2014	3.0	-0.1	-0.9	-0.5
2013	0.4	1.9	3.0	2.7
2012	3.1	2.9	-0.1	0.3
2011	0.8	-1.0	-0.4	0.1
2010	4.5	3.7	5.7	3.0
2009	-8.8	-6.4	-5.1	-1.3
2008	0.5	-0.2	-0.9	-3.7
2007	2.3	1.9	1.6	0.9
2006	2.4	1.4	0.3	1.6
2005	1.1	1.5	1.8	2.2
2004	3.2	2.2	2.4	1.0
2003	1.5	1.4	1.3	1.9
2002	-1.6	-0.2	0.9	1.3
2001	2.2	1.2	-0.1	-1.5
2000	3.3	2.8	2.4	2.6
1999	-0.5	-0.1	0.3	-0.7
1998	-1.5	-1.0	-1.3	-0.7
1997	2.8	1.0	1.0	-0.3

Source: Japan Economic and Social Research Institute, Cabinet Office

https://www.cao.go.jp/index-e.html

http://wwwa.cao.go.jp/notice/20191101notice.html

 

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.