Abstract
This paper is a survey of the econometric studies on macro and sectoral behavior in Japan over the last 10 to 15years. The survey is divided into two parts. After reviewing the main characteristics of recent econometric modeling efforts, the first part concerns with macro or economy-wide econometric model buildings. Here, major econometric models of Japan including a global international model are compared in terms of structural specification and fiscal policy multiplier.
The second part reports the results of empirical studies on sectoral behavior, namely those on business fixed investment demand and production-cost function in the business firm, and those on consumption-saving behavior in the household sector. As for the business fixed investment demand function, the empirical results based on Tobin's q theory are surveyed and are critically examined in terms of theoretical specification and statistical validity. Econometric studies on production and cost functions are assessed focusing on factor substitutability, technical progress, scale economy and economy of scope. Turning to the household behavior, a brief survey is made on the recent development in the consumption-saving analysis along Life Cycle-Permanent Income Hypothesis initiated by R. Hall. Then, the discussions concerning Japan's high saving rate are empirically examined, followed by empirical analysis of consumption expenditure pattern, asset portfolio and labor supply behavior.
