Shuntaro Shishido

The book describes the structure of Keynes-Leontief Model (KLM) of Japan and discuss how the Japanese economy could overcome the long-term economic deflation since the mid-1990s. The large scale econometric model and its analysis have been important for planning several policy measures and examining the economic structure of a country. However, it seems that development and maintenance of the KLM would be very costly. The book discusses how the KLM is developed and employed for the policy analyses.

This study quantifies the relationships between the economies of the Unites States and Japan on an industrially disaggregated basis. It links two large-scale econometric models of the U. S. and Japan in the framework of the world model system (Project LINK). These models are useful not only for forecasts and aggregate policy studies, but also for detailed investigation of industrial changes and trade policy on sectoral output employment, trade balance, and inflation in both countries. The interactions with other parts of the world are also taken into account. Applications to policy changes and exchange rate variations illustrate the potential of the model system and provide a powerful insight into the operation of two closely integrated economies. A pioneering effort to link quantitatively the relationships between the economies of the United States and Japan, this volume will be of interest to economists and policymakers here and abroad.