The Impacts of Scale Economies and Technological Change on the Growth of TFP

Abstract

As is well known, the Japanese economy as a whole experienced rapid growth from around the mid-1950s through to the early-1970s, with the annual compound growth rate for this period averaging more than 10 per cent. However, after this period of dramatic growth, it entered upon a stage of moderate growth with a much lower average annual compound growth rate of around 4 per cent. How did the agricultural sector fare through such a drastic change in the overall economic environment? What was the connection between agricultural production and the Japanese economy as a whole during the periods of rapid and slow or steady growth? In particular, it is of great interest and critical importance to analyze changes in TFP, since it is a major contributing factor to growth in agricultural production. Accordingly, the objective of this chapter is to measure and analyze TFP in agricultural production during the period 1957–97.