Case Analysis: Japan's Economic Malaise Essay

1760 Words Jan 16th, 2014 8 Pages
CLOSING CASE for week two
Case Analysis: Japan's Economic Malaise
Review the Japan's Economic Malaise Case Study at the end of Chapter 3 of the Hill text. Answer the five Case Discussion questions in a Word document and submit your responses to the Week 2 Course Dropbox.
You will find at the end of chapter 3 starting on p.95 in our electronic e-Book in the classroom.
Japan’s Economic Malaise
In 1989 Japan was widely viewed as an economic super-power. After three decades of robust economic growth it had risen to become the world’s second-largest economy. Japanese companies seemed to be obliterating entire American industries, from automobiles and semiconductors to earthmoving equipment and consumer electronics. Japanese companies
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The high debt load is now a limit on the ability of the Japanese government to adopt additional expansionary policies.
In seeking to explain Japan’s prolonged malaise, many economists also point to demographic factors. In the 1970s and 1980s birthrates in Japan fell below replacement levels, leaving it with one of the oldest populations in the world. The working age population peaked at 87 million in 1995 and has been falling since. On current trends, by 2030 it will be 67 million. Every year there are fewer and fewer working age people to support ever more retired people—and Japan’s retired people are notorious for not spending. Japan could reverse this trend by increasing immigration or boosting the birthrate, but neither of these seems likely at the moment. Increasingly, young people are pessimistic about the future. All they have known is a world where prices for everything, including the price of labor, have fallen. They have diminished expectations.
Case Discussion Questions
1. In the 1980s Japan was viewed as one of the world’s most dynamic economies. Today it is viewed as one of its most stagnant. Why has the Japanese economy stagnated?
Similar to what happened to the collapse of the housing bubble in the US in 2008. Japan suffered the same during the eighties. Japan’s real estate and…