Japanese wages highly sensitive to economic changes, impacting business cycle fluctuations.
The article examines recent business cycle fluctuations in Japan from 1980 to 2000. By analyzing macroeconomic time series, the researchers found that non-scheduled hours worked can predict overall economic fluctuations. Wages in Japan are highly influenced by changes in economic activity due to non-scheduled cash earnings and bonuses. Additionally, the relationship between money and output shifted significantly after the burst of the bubble economy in 1991.