Working Paper: NBER ID: w10058
Authors: James Harrigan; Rohit Vanjani
Abstract: Does Japanese trade in manufactured goods differ from the rest-of-the world average and from the U.S.? We use a simple industry-level gravity model and 1981-1998 data to answer this question. We construct a measure of normalized imports by dividing bilateral industry-level imports by the importer's aggregate absorption and the exporter's industry output. We find that Japan imports less than other countries, but also exports less than other countries. Relative to the U.S., Japanese export performance is half as strong today as it was in the mid-1980s. Bilaterally, Japan's normalized imports from the U.S. are greater than U.S. normalized imports from Japan.
Keywords: Japan; trade; gravity model; manufactured goods; bilateral trade
JEL Codes: F1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Japan's trade is not as open as the US's (F14) | Japan imports less than most countries (F14) |
| Japan imports less than most countries (F14) | Japan exports less than most countries (F14) |
| Japan imports less than most countries (F14) | Japan's normalized imports from the US are greater than US normalized imports from Japan (F14) |
| Japan's export performance has deteriorated (F14) | Japan exports only a quarter as much as the US by 1998 compared to 60% in the mid-1980s (F14) |
| Japan is more open to US imports than the US is to Japanese imports (F14) | US runs a trade surplus with Japan (F14) |