Was recovery of Japanese economy in mid-00's led by export?

No, it wasn't. And here is the reason.


This graph shows that net export did contribute to nominal GDP growth in 2002-2003, but after that, the contribution was marginal. In 2004-2005, the contribution was even negative.

But what is important is real GDP, and net export contributed to that growth, right?

...Um, not necessarily.

Well, it's true that net export contribute to real GDP growth, as I showed in the last graph in my previous post. I'll show the graph again.


This is in stark contrast to the nominal-based graph.

Then, what caused this difference?

Two graphs below answer that question.

(quarterly basis, seasonally adjusted annual rate, billion yen)

On real basis, import did not increase much from 2003 onward, but export did.
On the other hand, both import and export increased on nominal basis, so net export did not change much.

This means that import price hike, caused by the price hike of oil and other natural resources, was what led to contribution of net export to GDP growth on real basis. Of course, it has nothing to do with the increase in export. Yes, export did increase, but that increase was consumed by the increase in import.

In other words, Japan increased export to pay for the hike in price what they import. Otherwise it would have run trade deficit. That situation could be hardly called export-led growth.

Put another way, real GDP growth was somewhat due to net export, but real GDI (Gross Domestic Income) growth wasn't. This is because real GDI is approximately calculated by replacing net export factor from real to nominal. From this point of view, Japan is in contrast to Canada as Prof. Stephen Gordon explained.