A CENTURY OF JAPANESE BUSINESS CYCLES - DID POLICY STABILIZE ACTIVITY

While Japan's postwar macroeconomic performance has been impressive, it is less so in the area of cyclical fluctuations-the improvement relative to the prewar period is modest, and the record vis-à-vis other major economies since the 1950s is poor. Diminished volatility in the 1950s and 1960s was due mainly to a stable world economy. Reasons for a relatively disappointing comparative outcome may have been a very high rate of fixed investment demand, which fluctuated sharply, and a macroeconomic policy that through most of the past four decades played a pro- rather than a counter-cyclical role. © 1991.