Japanese Economy During The World War

2140 Words9 Pages
Introduction Since the Second World War, the Japanese economy had experienced remarkable growth, transforming from a developing to an advanced developed economy in a single generation. However, on the edge of a three-decade long “Economic Miracle,” in the late 1980s, Japan faced its regrettable “bubble economy” in which asset prices rapidly soared, money supply and credit underwent sizable increase, and economic activity overheated for a prolonged period (Okina p.396). At the bubble’s peak in 1989, the Japanese stock market obtained a value of around $4 trillion, reaching the benchmark Nikkei 225 stock average of ¥38,915 (four times the level they had been in 1983) (Siebert p.9). This was approximately 44 percent of the world’s equity market capitalization (Stone p.149). At around similar time frame, Japan also saw a spectacular surge in land prices with the land values five times that of the United States (Stone p.149). Hence, during this time, the economy relished an investment and consumption boom to the extent that Japan rapidly became known as the world’s largest creditor country. However, such record growth fell drastically with the burst of the bubble: the stock market plummeted by over 60 percent from its peak in 1989 to 1992 while speculative land prices fell over 50 percent and essential land prices declined by about 15 to 20 percent (Okina p.397). Overall, the bursting of the bubble resulted in a detrimental decline in asset prices, the accumulation of enormous
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