The question we address in this paper is why the Japanese miracle didn't take place until after World War II. For much … of the pre-WWII period, Japan's real GNP per worker was not much more than a third of that of the U.S., with falling … barrier, Japan's prewar GNP per worker would have been close to a half of the U.S. The labor barrier existed because, we argue …

to Japan's macroeconomic performance in the 1990s. Compared to the one-sector analysis of Japan in the 1990s in Hayashi … and Prescott (2002), our model does slightly better or just as well in accounting for Japan's output slump and does worse … in accounting for the capital-output ratio. We also show that, to revive a 2% long-term growth in percapita GDP, Japan …

rate (ratio of depreciation to the capital stock) is implausibly high. I argue in this rejoinder that Japan's high … Japan. Second, equipment capital (a component of the denominator in the depreciation rate) in the Japanese national accounts … seems underestimated. Therefore, my estimate of the level of depreciation for Japan does not seem exaggerated …

This paper examines available evidence on Japan's wealth accumulation. Time-series evidence over the last one hundred … accumulation in pre-war Japan was so slow. Perhaps growth in pre-war Japan was hampered by harmful effects of misguided government …