Recent trends in consumption in Japan and the other G7 countries

Abstract

In this paper, we present data on recent trends in private consumption and in possible determinants of private consumption (such as GDP, household incomes, household saving rates, household wealth, and employment conditions) in the group of seven (G7) countries and find that there has been significant variability among the G7 countries not only in their private consumption growth rates but also in the determinants of private consumption growth during the 2002–2007 period. With respect to Japan, we find that private consumption has been relatively stagnant during the 2002–2007 period and that the stagnation of private consumption has been due to the stagnation of household income and of household wealth and the relative stability of the household saving rate.

Keywords:

• consumption
• private consumption
• GDP
• economic growth
• households
• saving
• wealth
• employment conditions
• unemployment rates
• group of seven (G7)
• Japan

Acknowledgements

This research was conducted as part of the Social Resilience Project 2011 of the Pacific Economic Cooperation Council (PECC) and the Japan Institute of International Affairs (JIIA), and the author is grateful to Dr. Yoko Niimi, Ambassador Yoshiji Nogami, the other participants of the Pacific Economic Cooperation Council (PECC) International Workshop on Social Resilience Project 2011, held on July 12, 2011, at Plaza Hall, Kasumigaseki Building, Tokyo, Japan, and of the Twentieth General Meeting of the Pacific Economic Cooperation Council (PECC): State of the Region, held on September 29, 2011, at the Madison Hotel, Washington, D.C., U.S.A., the Guest Editor Noel Gaston, and an anonymous referee for their helpful comments.