01737cas a2200241 a 4500 AALejournalIMF016610 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498316637 1018-5941 BD-DhAAL BD-DhAAL Porcellacchia, Davide. Wage-Price Dynamics and Structural Reforms in Japan / Davide Porcellacchia. Washington, D.C. : International Monetary Fund, 2016. 1 online resource (26 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Structural reforms in the liquidity trap need not be deflationary. This paper develops a simple framework to study the role that key characteristics of Japan's labor and product markets-labor-market duality and weak corporate governance-play in generating unfavorable wage-price dynamics. The model allows a discussion of whether and in what form structural reforms may contribute to Japan's short-run goal of reflating the economy. It finds that boosting inflation with structural reforms implies an unusual trade-off with employment, that is an inverted Phillips curve. Simultaneous implementation of labor-market and product-market reforms is most effective in terms of reflating the economy. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2016/020 Full text available on IMF http://elibrary.imf.org/view/journals/001/2016/020/001.2016.issue-020-en.xml IMF e-Library