Business cycle fluctuations in Japanese macroeconomic time series: 1980-2000

This paper provides the robust stylized facts for recent Japanese business cycle fluctuations, by examining the cyclical component of macroeconomic time series based on the frequency domain analysis. The results confirm many of the conventional views on business cycles in Japan. Among the most interesting findings are that non-scheduled hours worked plays a key role as a buffer for labor inputs. Distinctively, because of the behavior of non-scheduled cash earnings and bonuses, wages in Japan are very sensitive to changes in the level of economic activity. Also significant, the relationship between money and output has changed dramatically after the collapse of the bubble economy in 1991.