Programs: Raising Industrial and Firm Productivity

Capital Accumulation and Productivity Growth after the COVID-19 Crisis

Project Leader/Sub-Leader


MIYAGAWA Tsutomu (Faculty Fellow)



The COVID-19 crisis has caused massive damage to the Japanese economy. The real GDP in the second quarter in 2020 was the same as that in the second quarter in 2011 after the Great East-Japan Earthquake. We lost the value added which had accumulated over the previous 9 years since then. As we are not able to use the tool of further expanding monetary policy, we have to look for alternative policies to enable economic recovery.

An alternative approach which we propose in our project is to accumulate new types of capital in the public sector. Especially, we focus on capital accumulation in the government sector and the medical sector. In the government sector, we focus on accumulation of intangibles. In the COVID-19 crisis, the government's outdated style of administration has been criticized specifically for its lack of digitalization. If the Japanese government aim to improve its public service through digitalization, it needs to accumulate several types of intangibles, such as skilled workers, and undergo organizational change. In this project we measure intangibles which the Japanese government holds and examine whether these intangibles contribute to efficient government service.

With the COVID-19 crisis, the Japanese medical system seems to be close to medical collapse compared to other advanced countries, which has forced the government to initiate behavioral restrictions, despite the fact that the number of infected persons and death toll in Japan are both much lower than those in other advanced countries. We present an overview of the Japanese medical system including several regulations and we examine why medical capacity, including ICU and skilled medical workers, is inadequate for this pandemic. The research output concerning the COVID-19 crisis will be published in the forthcoming book on the effect of the COVID-19 crisis on the Japanese economy.We will continue research on the project's topics even after the aforementioned book is published.

Government service and medical service are included in the services under social common capital proposed by Uzawa (1988). In this project, we provide an overview of the concept of social common capital and the economic effects of social common capital.

January 12, 2021 - June 30, 2023

(During the research project period, the research activity period is set from January 12, 2021 to December 31, 2022, and the data usage reporting period is set from January 1, 2023 to June 30, 2023.)

Major Research Results


RIETI Discussion Papers


RIETI Discussion Papers

RIETI Policy Discussion Papers