Using Multiplier Analyses in Analyzing the Roles of Japanese Industrial Sectors

Abstract

The purpose of this study is to analyze the roles of industrial sectors in the Japanese national economy by using simple output multiplier, and simple household income multiplier, the analysis tools in Input-Output (IO) analysis. The analysis period of the study is 2011. The results show that, on the period of analysis, manufacturing sector had the highest simple output multiplier value. Therefore, one can argue that an additional final demand for the sector would generate the most attractive effect to the Japanese economy by using the multiplier on the period of analysis. Conversely, the lowest value of the multiplier was owned by the real estate sector in 2011. On the other hand, from the point of view of simple household income multiplier, the highest value was owned by the construction sector on the analysis period. This result indicates that an additional yen of final demand for the sector would generate the highest new household income on the period of analysis. On the contrary, as with the previous multiplier, the real estate sector had the lowest simple household income multiplier value in 2011.