Japanese Economy Essay example - 1312 Words

Japanese Economy The Japanese economy is the second largest in the world, behind only the American economy. As such, its decade long downward slide has many lessons the American economy can learn from. The difference between the economies is one of degree, not type. Our own economy has been faltering of late, bringing fear of recession. The Japanese have been on that road for over ten years, and of late have been making aggressive moves towards a restructuring. This paper will look at the types of reforms planned in the Japanese economy, and more importantly if these reforms will be enough to pull a modern economy from the doldrums. The current state of the Japanese economy has much to do with a failure to adjust. In†¦show more content†¦The bank lowered already low interest rates to an effective rate of zero percent. In a familiar scenario, this has led to Japanese banks stampeding to get even more loans. The Central Bank of Japan sees this as but one step in their new, more aggressive stance. They are to be applauded for this, as it involves coupling the lower rate with economic packages designed to give Japanese firms a way to upgrade their devalued equipment, thus boosting industrial output. One package set a two-year deadline for major banks to dispose of their riskiest bad loans. These loans were taken out by the banks during the easy lending period of the mid-1980s. In the view of many economists, these loans are the very thing crippling the Japanese economy and holding the country back from a successful turn-around (The 21st Century Public Policy Institute, 1998). It seems that it would have been more appropriate for the Central Bank to hold prime rates at the previous level. This, combined with the deadline for repayment of the riskiest debt, may have been just what the economy needed to attain serious growth. As it stands, however, there exists no plan to hike the rate back up. The rate lowering has already had negative effects. The Nikkei, Japans main indicator of investment health is in danger of falling to a 16 year low. It appears that even the banks and investors knowShow MoreRelatedStagnant Japanese Economy Essay1434 Words   |  6 PagesSomething 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 DemocraticRead MoreThe Bubble Economy. The Direct Cause Of The Japanese Banking834 Words   |  4 PagesThe Bubble Economy The direct cause of the Japanese banking crisis was the collapse of the asset price bubble during the late 1980s to the early 1990s. During 1980s, sustained economic growth and low inflation rate were the main characteristics of macroeconomic environment in Japan. This condition caused the upward growth expectations of asset prices, uncontrolled credit expansion and financial deregulation. At the same period, the United States has a substantial increase in the current accountRead MoreMonetary Policy Adopted On Bubble Economy Period Of Japanese Japan1331 Words   |  6 PagesThe topic of this dissertation is to discuss the monetary policy adopted in bubble economy period of Japanese. As Japanese economics is a specific example around the world. The Japanese government adopted many effective ways to revitalize the economy with the result that its economy rose abruptly after the World war II. However, because Japan entered a liquidity trap around 1990s, and experienced a â€Å"Lost Decade† (Hiyashi and Prescott, 2002), the government experienced many economic problems suchRead MoreThe United States And Japanese Economies1583 Words   |  7 PagesA Leading Indicators Comparison of the United States and Japanese Economies 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 economicRead MoreJapanese Economy During The World War2140 Words   |  9 PagesWorld 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 â€Å"Economic Miracle,† in the late 1980s, Japan faced its regrettable â€Å"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 pe ak in 1989, the Japanese stock market obtainedRead MoreJapanese Automakers in the U.S. Economy Essay1098 Words   |  5 Pages Japanese Automakers in the U.S. Economy Automobiles are the most frequently used form of transportation in the United States and much of the world. Owning a vehicle is almost a necessity in modern society. But when you go to buy a new vehicle, you are faced with the question What should I buy? Foreign, most popular being Honda, Toyota and Nissan. Or domestic like Ford, GM and Chrysler, also known as Americas Big Three. Should we feel guilty walking into a localRead MoreThe Triple Disaster of March 2011 and Its Impact on Japanese Politics and Economy2185 Words   |  9 Pages1. The triple disaster of March 2011 and its impact on Japanese politics and economy The triple disaster: earthquake, tsunami and Fukushima nuclear accident. The earthquake and tsunami caused extensive and severe structural damage in north-eastern Japan, including heavy damage to roads and railways as well as fires in many areas, and a dam collapse. Naoto Kan said, In the 65 years after the end of World War II, this is the toughest and the most difficult crisis for Japan. Around 4.4 millionRead MoreJapan and Globalization963 Words   |  4 Pagestransformation of Japanese society. Global processes have increased wages and homelessness, strengthened environmental management programs, shifted governance towards regionalism, and threatened linguistic diversity in Japan. Numerous studies on Japan’s economy provide both the positive and negative effects of globalization. Nakamura (2013) used Japanese wage censuses from 1998, 2000, and 2002 to explore the effects of inward and outward foreign direct investment (FDI) on the wages of Japanese workers inRead MoreThe Importance Of Nation-State Policy881 Words   |  4 Pagesinterconnected and globalized world, consociated by instantaneous worldwide communication and the free dissemination of information. With this new era of technology, economic policies of nation-states have become so interdependent that most nation-state economies would be crippled without their respective international trading partners. As such, one may wonder if an introspective national policy is appropriate, as argued for by the source. For example, one may contend that international cooperation inevitablyRead MoreJapan s Demand For British Based Capital1568 Words   |  7 PagesIn the post-Fordist economy, there are few al ternative strategies which would mean to rebuild industry in the concern for British-based capital. The first strategy is ‘The Japanisation Strategy’. â€Å"Japan has been the home base for the new production, together with West Germany, Northern Italy and parts of the Scandinavian economy.† (Murray, 1989) The exclusive achievement of Japanese production industry, regularly at the expenditure of Western manufacturers, has incited this increased interest. Japan