Working Less and Bargain Hunting More: Macroimplications of Sales during Japan's Lost Decades

Nao Sudo, Kozo Ueda, Kota Watanabe, Tsutomu Watanabe

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

Standard New Keynesian models have often neglected temporary sales. In this study, we ask whether this treatment is appropriate. We use Japanese scanner data covering the last two decades and find a negative correlation between the frequency of sales and hours worked. We then construct a model that takes households' decisions regarding their allocation of time for work, leisure, and bargain hunting into account. We show that the decline in hours worked explains the rise in the frequency of sales. The real effect of monetary policy shocks weakens by around 40% due to temporary sales, but monetary policy still matters.

Original languageEnglish
Pages (from-to)449-478
Number of pages30
JournalJournal of Money, Credit and Banking
Volume50
Issue number2-3
DOIs
Publication statusPublished - 2018 Mar 1

Keywords

  • E31
  • E32
  • E52
  • lost decades
  • monetary policy
  • sales
  • time use

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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