The Economic Crisis Of Japan

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Introduction Japan enjoyed an Asia’s economic miracle that the world witnessed a country that started out poor and had become the second-largest industrial power during the postwar era. However, a large bubble economy had been irritated by the growth, especially in the stock and asset price markets, the economy suffered a near catastrophic crash caused by speculative mania(Hall and Von Wiesen, 2014). The Japanese economy has stagnated after the collapse of bubble economy. The economic situation has been in a wide deflation. In the last two decades, Japanese government took several measures to solve the deflation problem and spur the economy. There are fiscal expansion, conventional monetary measures, Yen depreciation, bank recapitalisation, Quantitative Easing, and three arrows of Abenomics. But the situation did not change much, the balance sheet of the country shows continuous economic recession. The paper is organized in the following way. Section 2 briefly describes the prolonged deflation in Japan. Section 3 evaluates policies proposed by the government and gives some reasons of unsuccessful policies. Section 4 summarizes the policy implementation. Background The long-lasting deflation exert a tremendous influence in Japan, the persistent decrease in the level of consumer prices shrunk profits and investments in corporate, wages and consumption in individuals. This leaded to a further price decline. Such vicious cycle has caused the recovery of Japanese economy to
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