Essay about Japan's Economic Slump

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Japan's Economic Slump

1. Introduction ===============

In only fifty years, Japan has moved from poverty to the highest levels of income, from economic insignificance to leadership from the import of technology and capital to being a major source of their export, from less developed status to the lead of economic position after the United States. After being the best performer in the Organisation for Economic Cooperation and Development (OECD) during the forty years, Japan has experienced economic stagnation since the beginning of the 1990s.

The revival of the Japanese economy is of great importance not only to Japan but also to the well being of global economy. Therefore, the
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The reasons for this include high rates of both personal savings and privates-sector facilities investment, labour force with strong work ethic, ample supply of cheap oil, innovative technology, and effective government intervention in private sector industries (Asianinfo). Japan was also a major beneficiary of the swift growth attained by the post-war world economy under the free trade advanced by the International Monetary Fund and the General Agreement on Tariffs and Trade. The industry sector was and still is the main contributor to the Japanese economy.

By the late 1960s, Japan became the first post-war era nation classified as "less-developed" to achieve "developed" status (Asianinfo). In 2000, Japan's gross domestic product (GDP) was $4.648 trillion, which represent approximately 15% of the world GDP. Its percapita GDP income in 2000 was $36,634, which is one of the highest in the world (Japan Finance ministry). Apart from the above, the real economic growth between 1960s and 1980s had been excellent. The average real economic growth during the 1960s was 10%. In the 1970s, the average rate was 5% at which time the Japanese economy was considered as a matured economy and followed by 4% during the 1980s (Bigsten, 2004, p.3). Then in 1991, the