Publication

This paper estimates industry-level productivity growth in Japan and contrasts the tradable and non tradable sectors. The author argues that the tradable sector played a fundamental role in Japan's postwar economic growth. This supports the idea that the Japanese real exchange rate has appreciated through the Harrod-Balassa effect. The paper emphasizes the low productivity growth of the economy and the under performance of the non-tradeable sector in the 1970s, before the Japanese economy entered its 'lost decade' in the 1990s.