Baumol, Engel, and beyond

Accounting for a century of structural transformation in Japan, 1885-1985

Bibliographic Data

ID3209784
AuthorsKyoji Fukao (0000-0002-9471-6653, Institute of Economic Research, Hitotsubashi University), Saumik Paul (Newcastle University and IZA, corresponding author)
Year2021
Volume74
Issue1
Pages164-180
Publication date2021-02-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic History Review (JOURNAL)
Journal identifiersISSN: 0013-0117 • E-ISSN: 1468-0289
PublisherWiley (PUBLISHER • GB)
DOI10.1111/ehr.13021
OpenAlexW3081531537
LanguageEN
Citations received2
References cited18

This article examines the drivers of the long-run structural transformation in Japan. It uses a dynamic input-output framework that decomposes the reallocation of the total output across sectors into two components: the demand side and the supply side, or technological change. To perform this task, we employ 13 seven-sector input-output tables spanning 100 years (1885 to 1985). The results show that the demand-side factors, as a combination of the Baumol and Engel effects, were the key explanatory factors in more than 60 per cent of the sector-period cases in the pre-Second World War period, while the supply-side effect drove structural transformation in more than 75 per cent of such cases in the post-Second World War period. Detailed decomposition results suggest that in most of the sectors, changes in private consumption were the dominant force behind the demand-side explanations. The demand effect was found to be strongest in the commerce and services sector, which contributed to the rapid growth of GDP in Japan throughout the twentieth century

Consumption (sociology) · Demand side · Economics · Economy · Final demand · Macroeconomics · Private consumption · Production (economics) · Sociology · Supply and demand · Supply side · Economic Growth and Productivity · Environmental Impact and Sustainability · Fiscal Policy and Economic Growth

Tools

Open DOI