Working Paper: NBER ID: w1637
Authors: Naoko Ishii; Warwick McKibbin; Jeffrey Sachs
Abstract: In this paper we examine the macroeconomic interdependence of Japan and the U.S. using a medium-scale simulation model of the world economy. Our goal is to determine how shifts in macroeconomic policies in the U.S. or Japan affectthe other country as well as the rest of the world. In particular we examine the following three issues: (1) the likely macroeconomic ramifications for the U.S., Europe and Japan of significant budget cuts in the U.S.; (2) the macroeconomic implications of a protectionist tariff imposed by the U.S.; and (3) the scope for policy coordination among the U.S., Japan and Europe.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| US fiscal expansion (E62) | Japanese GNP (N15) |
| Japanese fiscal expansion (E62) | US GNP (E20) |
| US budget cuts (H56) | Japanese economic performance (P17) |
| US protectionist tariff (F13) | trade balance alterations (F14) |
| US protectionist tariff (F13) | retaliatory measures from Japan (F52) |
| US protectionist tariff (F13) | bilateral trade dynamics (F10) |