Price Changes in a Dual Economy

One of the frequently mentioned features of postwar Japanese economic growth concerns divergent changes in the sectoral wholesale price indexes: the price index for the "modern" sector has decreased slightly or remained constant, whereas the price index for the "nonmodern" sector has registered a rapid increase, especially in the 1960s. A rapid rise in the latter price index has been one of the main reasons for the sharp increase in the consumer price index. The modern sector includes large manufacturing enterprises and the nonmodern sector refers to primary industry and small-scale manufacturing enterprises.