Japan's Economic History in the Last Forty Years Essay

Its actions have helped initiate new industries, cushion the effects of economic depression, create a sound economic infrastructure, and protect the living standards of the citizenry. Indeed, so pervasive has government influence in the economy seemed that many foreign observers have popularized the term "Japan Inc." to describe its alliance of business and government interests. Whether Japan in the mid-1990s fit this picture seems questionable, but there is little doubt that government agencies continue to influence the economy through a variety of policies. Not only did the American press use the same terms as the federal government, but in doing so it also helped lay the framework of the Japanese- American internment in a completely inaccurate way (Lau, 2014).

Something having no current or flow and often having an unpleasant smell defines the word stagnant. The Japanese economy has been stagnant for about two decades now. There are many reasons for this ‘unpleasant smell’. Firstly, the fiscal policy in Japan, the surplus in savings, its once economic bubble power and the policy management in Japan put an end to any flow that there once was. Secondly, the Global flow and structural impediments are a cause of the lack of current. The liberal Democratic Party and Vested Interest Groups and also the monetarist explanation come into play. Looking at these such topics closely give a better look and realization of Japans stagnant economy.

Today in Japan, a reinvention is necessary. There are many struggles with the young generation, the old generation, and catastrophic events which should be addressed. Specifically, the Japanese economy has been experiencing deflation for the past twenty years. In an article, the results of the deflation were described. The authors said, “Because of fewer available jobs and lower

The graph of economic growth look so nice and strong. People were being very optimistic about the economy, making Japan in the emotion of euphoria, which started a trend of investing.

in a mere half-century Japan had gone from a backward country being virtually dismissed by the West as an obscure and rather backward to being recognized as a major world power. It was arguably the most remarkable achievement of any nation in world history. (Henshall, 1999, P102)

During the decade of the 1960s, the monetary value of exports grew at an average annual rate faster than the average rate of all noncommunist countries. This rapid productivity growth in manufacturing industries made Japanese products more competitive in world markets. With the fixed exchange rate for yen during the decade of 1960, the chronic deficits that the nation faced in the 1950s had disappeared by the middle of the 1970s.

The statistics show that the growth of the economy in Japan comes out very good, but it is a

From the time following World War II, Japan's government cooperation, work ethics, and highly defense technology have helped built up a strong advanced economy. Two

The Greater Japanese Empire was one of the fastest growing and most dominant world powers of the late 1800’s and early 1900’s. After being created as a result of the Meiji Restoration of 1868, the Empire of Japan grew quite well and prospered until it was dissolved in 1947. Although Japan experienced a long period of economic strife, massive destruction and a switch from a military to a consumer based economy, after World War II, the country emerged stronger than ever and became a serious player on the world economic stage. While scholars have debated World War II’s impact on Japan’s economy, ultimately WWII allowed Japan to emerge with adaptive and innovative manufacturing capabilities.

In September 1945, Japan had nearly 3 million war dead and the loss of a quarter of the national wealth. Post war Japanese economic take off was due to a variety of factors that had to do with American policies towards Japan, the international market, social mobilization, existent industrial capacities and experience, and government policies and expertise, among other things.

Japan was one of the first Asian countries to have a successful economy. Unlike other economies, Japan gew through high input and efficiency growth. It was clear back then that Japan was certain to catch up, or at least come close to the United State’s economy. Despite their past growth though, they have since slowed down and reach a plateau of growth. It was predicted that they would surpass the United States by 1998, but instead hit its limits. Japan was unique compared to its neighboring countries like its big brother

The United States has for more than a century maintained the largest economy in the world. Japan, on the other hand, currently has the third largest economy in the world (according to some estimates) after realizing incredible growth since the damage and ruin it experienced during World War II (BBC, 2015). This essay compares and contrasts the current economies of the United States and Japan in terms of three leading economic indicators: real Gross Domestic Product (GDP), inflation, and unemployment. While some similarities exist between the two economies this comparison will highlight what the differences mean in terms of economic health for the two countries.

“What kept Japan down were repeated macroeconomic policy mistakes” (The New York times, 2008). In fact, the Japanese government’s action was not effective regarding the situation of their economy. The use of monetary policy did not only worsen the effect of the liquidity trap but also create a deflationary pressure. On the other hand, their slow cuts in Bank of Japan nominal interest rate and deflation lead to nominal and real interest rate of different levels. Even nominal interest rate at zero, real interest rate has been positive. Fiscal policy was inadequate to increase demand and output but led to deficits and accumulating government debt.

Investment led growth, meaning, not export led, is what really pushed Japan’s progress. Both big and small businesses around Japan used their new found specializations to invested in the government and the country. “Rising domestic savings made increasing capital accumulation possible” (Mosk 2004). At this point, with their

Japan ranks as the third largest economy in the world as of 2010. The GDP at current prices in US dollars in Japan was reported at 5068.06 billion in 2009, according to the International Monetary Fund (IMF). Japan’s resurgence after World War II has however reached an inflection point in yearly 1989 after the burst of Japan’s asset price and real estate bubbles. As can be seen from the graph below, Japan’s GDP has hovered around the same level through more than 20 years of economic stagnation. The GDP’s slow growth has been exacerbated by the world financial crisis of 2008. A major landmark of Japan’s stagnation has been the BOJ’s fight against deflation.