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Can the Disparity between GDP and GDP Forecast Cause Economic Instability? The Recent Japanese Case

Journal: International Journal of Economics and Financial Research (Vol.2, No. 8)

Publication Date:

Authors : ;

Page : 155-160

Keywords : Economic stability; Forecast; GDP; Price.;

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Abstract

This paper investigates the link between forecast disparity and macroeconomic instability that results from the data revision of GDP and inflation in Japan. The recent Japanese case, which reflects the unconventional monetary policy conducted since 2013, is also examined. The empirical results show that such disparities do not cause economic instability; however, they have have done so after the unconventional and drastic monetary policy was conducted. On the other hand, exchange rates impacted economic stability for the total period. For the first part of the period under study (from 2000 to 2012), currency appreciation caused instability; however, for the more recent period, depreciation has caused such instability. Recently, macroeconomic instability has been linked with exchange rate movements.

Last modified: 2018-11-06 16:29:10