Abstract
To investigate the possible cause of Japan’s low-growth economy, we analyze the correlation between the quality of energy and economic production such as real GDP (Gross Domestic Product) and energy intensity over the 52-year period from 1965 to 2017. Corrections are made for the quality of energy using two approaches—a physical-based quality correction (i.e., transformity) and an economics-based quality correction. We find that energy quality affects economic production, and that real GDP correlates with quality-corrected final energy consumption. We imply that economic inactivity due to the decline in energy acquisition capacity represented by the decline in societal-scale EROI (Energy Return on Investment) may be directly linked to the low economy growth. We also find that the energy intensity decreases as the quality of energy used improves, and that regardless of quality correction, the energy intensity decreases as the electrification rate increases. Finally, we conclude that the quantity and quality of energy are closely related to the performance of the Japanese economy and point out the importance of energy quality in Japan—a country that has a low energy self-sufficiency rate in an era when the supply of energy is being depleted.
Highlights
The Japanese economy has suffered through a prolonged period of slow economic growth since the bursting of the bubble economy in the early 1990s
We investigate the possible cause of the low economic growth in Japan by analyzing the correlation between the quality of energy and economic output such as real gross domestic product (GDP) and energy intensity over the 52-year period from 1965 to 2017
To investigate the possible causes of Japan’s prolonged economic slowdown, we analyzed the Japanese economy from the perspectives of energy quality and examined the correlation between energy quality and economic production such as real GDP and energy intensity over the 52-year period from 1965 to 2017
Summary
The Japanese economy has suffered through a prolonged period of slow economic growth since the bursting of the bubble economy in the early 1990s. Hayashi and Prescott (2002) examined the Japanese economy in the 1990s, and found that the problem is not a breakdown of the financial system They pointed out the importance of total factor productivity (TFP), which is considered as an indicator showing the contribution of technological progress to economic growth. Fukao et al (2015) pointed out that Japan has been suffering from a large negative GDP gap since the 1970s
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More From: International Journal of Energy Economics and Policy
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