Book contents
- Frontmatter
- Contents
- Preface
- Abbreviations
- 1 Introduction and Overview
- 2 Economic and Political Institutions in the 1970s
- 3 The “High-Water Mark” of the Japanese Economy – A “Model” of Financial Liberalization: 1980 to 1985
- 4 An Accident Waiting to Happen – The Bubble Economy from 1985 to 1990
- 5 Economic and Financial Distress from 1990 to 2001 and the Turning Point
- 6 Why Did the Economic and Financial Distress Last So Long?
- 7 The Transition of Political Institutions in the 1990s and the New Century
- 8 Political Economy of Japan's Fiscal Program
- 9 Koizumi Administration's Reform in Broad Perspective: Fiscal Consolidation and Market Reform
- 10 Japan's Corporate Governance, Labor Practices, and Citizens' Social and Economic Life at the Beginning of the New Century
- 11 Japanese Political Economy in the First Decade of the New Century
- References
- Index
4 - An Accident Waiting to Happen – The Bubble Economy from 1985 to 1990
Published online by Cambridge University Press: 06 July 2010
- Frontmatter
- Contents
- Preface
- Abbreviations
- 1 Introduction and Overview
- 2 Economic and Political Institutions in the 1970s
- 3 The “High-Water Mark” of the Japanese Economy – A “Model” of Financial Liberalization: 1980 to 1985
- 4 An Accident Waiting to Happen – The Bubble Economy from 1985 to 1990
- 5 Economic and Financial Distress from 1990 to 2001 and the Turning Point
- 6 Why Did the Economic and Financial Distress Last So Long?
- 7 The Transition of Political Institutions in the 1990s and the New Century
- 8 Political Economy of Japan's Fiscal Program
- 9 Koizumi Administration's Reform in Broad Perspective: Fiscal Consolidation and Market Reform
- 10 Japan's Corporate Governance, Labor Practices, and Citizens' Social and Economic Life at the Beginning of the New Century
- 11 Japanese Political Economy in the First Decade of the New Century
- References
- Index
Summary
Introduction
The period from 1980 to 1985 represents the high-water mark of the Japanese economy in terms of financial and central bank policy outcomes. In terms of most economic and financial indicators, Japan's performance outpaced many other industrial countries, especially Japan's ability to achieve stable noninflationary growth in the face of a second set of oil price shocks in 1979 while at the same time adopting a policy of domestic and international financial liberalization. Japan appeared to have successfully adapted to the new economic, political, and technological environment and achieved an impressive record of economic and financial performance. It drew world attention both in terms of Japan's absolute performance and Japan's relative performance to much of the industrialized world.
Japan's state-directed approach to managing the economy combined with a powerful bureaucracy seemed to function in the more liberal and open financial environment as well as it did during the first part of the postwar period. The second half of the 1980s appeared to be a continuation of these trends. But in fact, a slow accumulation of stresses occurred as equity and land prices began to increase in 1985 and 1986 and then began to increase at very rapid rates, which by 1988 reflected a full-blown asset bubble. The asset inflation bubble combined with strong real GDP growth and price stability rationalized the phrase “bubble economy.
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- Chapter
- Information
- Japan since 1980 , pp. 83 - 100Publisher: Cambridge University PressPrint publication year: 2008