IESET.
Hypotheses·growth·demo_japan_ageing_deflation_link

Japan's prolonged deflationary period 1995-2015 is causally linked to its rapid demographic ageing through reduced aggregate demand from older cohorts and depressed wage growth.

The hypothesis predicts (a) a strong negative cointegrating relationship between old-age dependency ratio and headline CPI inflation in Japan over 1990-2023, and (b) Japan's inflation-ageing relationship is significantly steeper than the OECD median.

PARTIALengine/runs/demo_japan_ageing_deflation_link

PARTIAL — coef=-0.003516, p=0.938 (above α=0.10); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. coef=-0.003516, p=0.938 (above α=0.10); direction inconclusive

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 12 country or place units from 1990 to 2023, using a cointegration vecm design.

what was measured
What changed
  • Old age dependency ratio
What we checked
  • Cpi inflation yoy
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/demo_japan_ageing_deflation_link
1007550250199020072023JPNDEUITAKORFRAUSAGBR
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show cpi_inflation_yoy across 12 sampled countries over 1990–2023.
The shapes above are stylised — none of the lines are real data.
Placeholder for demo_japan_ageing_deflation_link. Published chart will be generated from engine/runs/demo_japan_ageing_deflation_link/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T11:58:04Z

Japan's prolonged deflationary period 1995-2015 is causally linked to its rapid demographic ageing through reduced aggregate demand from older cohorts and depressed wage growth. The hypothesis predicts (a) a strong negative cointegrating relationship between old-age dependency ratio and headline CPI inflation in Japan over 1990-2023, and (b) Japan's inflation-ageing relationship is significantly steeper than the OECD median.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if (a) cointegration is detected at 5% trace-test level for Japan, (b) long-run coefficient on OADR is negative on CPI with t-stat > 2, AND (c) Japan's OADR-on-CPI coefficient is in the bottom-quartile (most-negative) of the comparator panel. REFUTED if no cointegration, wrong-signed long-run coefficient, or Japan is indistinguishable from comparator median.

formal test & threshold
test:      japan_vecm_oadr_cpi_long_run_with_panel_benchmark
threshold: trace_test_p < 0.05 AND coef_oadr_long_run < 0 AND t_stat < -2 AND japan_quartile_rank <= 1

Method

Template
cointegration_vecm
Sample
12 countries · 1990 – 2023
Evidence type
associational

Johansen VECM on (CPI, OADR, M2 growth) for Japan 1990-2023; report long-run cointegrating coefficient on OADR. Compare to identical specification fit on each OECD comparator for the cross-country benchmark.

Data

VariableSourceTransform
cpi_inflation_yoy
outcome
world_bank_wdi:FP.CPI.TOTL.ZGtier 2
level
old_age_dependency_ratio
treatment
world_bank_wdi:SP.POP.DPND.OLtier 2
level
m2_growth
control
fred:JPNM2MBtier 1
yoy_log_diff
output_gap_proxy
control
oecd:OutputGaptier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — demo_japan_ageing_deflation_link

Verdict: PARTIAL — coef=-0.003516, p=0.938 (above α=0.10); direction inconclusive

Pre-registration

  • Claim: Japan's prolonged deflationary period 1995-2015 is causally linked to its rapid demographic ageing through reduced aggregate demand from older cohorts and depressed wage growth. The hypothesis predicts (a) a strong negative cointegrating relationship between old-age dependency ratio and headline CPI inflation in Japan over 1990-2023, and (b) Japan's inflation-ageing relationship is significantly steeper than the OECD median.
  • Falsification rule: SUPPORTED if (a) cointegration is detected at 5% trace-test level for Japan, (b) long-run coefficient on OADR is negative on CPI with t-stat > 2, AND (c) Japan's OADR-on-CPI coefficient is in the bottom-quartile (most-negative) of the comparator panel. REFUTED if no cointegration, wrong-signed long-run coefficient, or Japan is indistinguishable from comparator median.
  • Falsification test: japan_vecm_oadr_cpi_long_run_with_panel_benchmark

Estimate

  • Method: statsmodels OLS FE fallback (linearmodels failed: No module named 'linearmodels')
  • Coefficient (treatment): -0.003516
  • Std error: 0.04512
  • p-value: 0.938
  • Observations: 408, countries: 12
  • Within R²: 0.74
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • world_bank_wdi:FP.CPI.TOTL.ZG → cpi_inflation_yoy (outcome, publisher=world_bank_wdi, n=9066)
  • world_bank_wdi:SP.POP.DPND.OL → old_age_dependency_ratio (treatment, publisher=world_bank_wdi, n=16935)

Variables missing data

  • fred:JPNM2MB (controls, name=m2_growth) — vintage not on disk
  • imf:WEO.NGAP_NPGDP (controls, name=output_gap_proxy) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-04-30T11:58:04+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Authored framework. Read the transparency note.