Abstract
IMF Country Report No. 23/128
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IMF Country Report No. 23/128
JAPAN
SELECTED ISSUES
March 2023
This Selected Issues paper on Japan was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on March 7, 2023.
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© 2023 International Monetary Fund
Title page
JAPAN
SELECTED ISSUES
March 7, 2023
Approved By
Asia and Pacific Department
Prepared by a team led by Ranil Salgado with individual chapters authored by Kaustubh Chahande, Purva Khera, Asao Kohei, Pablo Lopez Murphy, and Rui Xu (all APD), Jochen M. Schmittmann (OAP), Zhiyong An (FAD), Salih Fendoglu (MCM), and Seho Kim (University of Maryland).
Contents
DRIVERS OF CORPORATE CASH HOLDINGS IN JAPAN
A. Introduction
B. Data and Methodology
C. Empirical Results
D. Policy Implications
FIGURES
1. Corporate Savings and Cash Holdings in Japan
2. Stylized Facts
TABLES
1. Determinants of Corporate Cash Holdings in Publicly Listed Firms
2. Determinants of Corporate Cash Holdings in Private Firms
References
A NEW GROWTH ENGINE FOR JAPAN: WOMEN IN STEM FIELDS
A. Introduction
B. An Endogenous Growth Model with STEM Talent
C. Results
D. Policy Implications
BOXES
1. Model Setup
2. Consumption-Equivalent Welfare
FIGURES
1. Women in Labor Market
2. Barriers to Female STEM Workers
TABLES
1. Parameter Calibration
2. Welfare Impact of Removing Barriers to Female STEM Workers
References
STRUCTURAL BARRIERS TO WAGE INCOME GROWTH IN JAPAN
A. Introduction
B. Resolving the “Wage Puzzle”
C. The rise of Part-Time workers and Their Reduced Hours
D. The Absence of a Wage-Price Spiral
E. Policy Implications
FIGURES
1. Wage Dynamics
2. Dual Labor Market
TABLE
1. Determinants of Wage Growth
References
JGB YIELD CURVE AND MACRO-FINANCIAL STABILITY: HOW WOULD A STEEPER JGB YIELD CURVE AFFECT BANK PROFITABILITY?
A. Introduction
B. Data and Characterization of JGB Yield Curve
C. Empirical Results
D. Taking Stock and Policy Implications
FIGURE
1. Characterization of the JGB Yield Curve
APPENDIX
I. Tables
References
OPTIONS TO STRENGTHEN THE SOCIAL SAFETY NET IN JAPAN
A. Introduction
B. The EITC in Theory
C. The EITC in OECD Countries
D. Key Policy Issues
BOX
1. The Public Assistance Program in Japan
FIGURES
1. Unemployment Rate and Poverty Rate of the Working-Age Population, 2018
2. Average Annual Income: Regular Versus Non-Regular Workers
References
THE FINANCIAL IMPACT OF CARBON TAXATION ON CORPORATES
A. Introduction
B. Emission Trends in Japan
C. Methodology and Data
D. Results
E. Conclusion and Policy Implications
FIGURES
1. Emission and Energy Trends
2. Sectoral Emissions
3. ICRs Under Carbon Tax Scenarios Covering Scope 1 and 2 Emissions
4. ICRs Under Carbon Tax Scenarios Covering Scope 1 Emissions Only
5. Share of Firms with Debt at Risk Covering Scope 1 and 2 Emissions
References