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- Japan economy after the war is over book
- Japan - The Fading Economy
During the economic boom, Japan rapidly became the world's second largest economy after the United States. By the s, Japan's demographics began stagnating and the workforce was no longer expanding as it did in the previous decades, despite per-worker productivity remaining high. It occurred chiefly due to the economic interventionism of the Japanese government and partly due to the aid and assistance of the U.
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Marshall Plan. The U. The Japanese economy survived from the deep recession caused by a loss of the U. By the late s, Japan had risen from the ashes of World War II to achieve an astoundingly rapid and complete economic recovery. According to Knox College Professor Mikiso Hane, the period leading up to the late s saw "the greatest years of prosperity Japan had seen since the Sun Goddess shut herself up behind a stone door to protest her brother Susano-o 's misbehavior.
Japanese economic miracle refers to the significant increase in the Japanese economy during the time between the end of World War II and the end of the Cold War — The economical miracle can be divided into four stages: the recovery — , the high increase — , the steady increase — , and the low increase — Although heavily destroyed by the nuclear bombardment in Hiroshima and Nagasaki , and other Allied air raids on Japan , Japan was able to recover from the trauma of WWII, and managed to become the second largest economic entity of the world after the United States by the s  Soviet Union excluded.
However, after three decades, Japan had experienced the so-called "recession in growth", as the United States had been imposing economic protection policy in oppressing Japanese production and forcing the appreciation of the Japanese yen. In preventing further oppression, Japan greatly improved its technological advances and raised the value of the yen, since to devalue, the yen would have brought further risk and a possible depressing effect on trade.
To alleviate the influence of recession, Japan imposed a series of economical and financial policy to stimulate the domestic demand.
Nevertheless, the bubble economy that took place in the late s and early s and the subsequent deflationary policy destroyed the Japanese economy. After the deflationary policy, the Japanese economy has been through a time of low increase period which has lasted until today. For more detailed information regarding this period, see Economic history of Japan and Lost Decade Japan. Japan was seriously harmed in WWII.
For instance, during wartime, "the Japanese cotton industry was brought to its knees by the end of the Second World War. Two-thirds of its prewar cotton spindles were scrapped by wartime administrators, and bombing and destruction of urban areas had caused a further loss of 20 percent of spinning and 14 percent of weaving capacity". By and large, every country has experienced some degree of industrial growth in the post-war period, those countries that achieved a heavy drop in industrial output due to war damage such as Japan, West Germany and Italy, have achieved a most rapid recovery.
In the case of Japan, industrial production decreased in to One reason for Japan's quick recovery from war trauma was the successful economic reform by the government. The government body principally concerned with industrial policy in Japan was the Ministry of International Trade and Industry.
The "Inclined Production Mode" refers to the inclined production that primarily focus on the production of raw material including steel, coal and cotton.
Textile production occupied more than By enhancing the recruitment of female labour, Japan managed to recover from the destruction. The legislation on recruitment contains three components: the restriction placed on regional recruitment and relocation of workers, the banning of the direct recruitment of new school leavers, and the direct recruitment of non-school leavers under explicitly detailed regulations issued by the Ministry of Labor.
As the United States was participating in the conflict on the Korean Peninsula, it turned to the Japanese economy for procurement of equipment and supplies because the logistics of shipping from the States soon became a significant problem for the military.
Japan's industry was soon providing the required munitions and logistics to the American forces fighting in Korea.
The demand stimulated the Japanese economy enabling it to recover quickly from the destruction of the Pacific War and provide the basis for the rapid expansion that was to follow. However, Japan's economic recovery and coming growth was at the expense of enabling the destruction of Korea and its people, its former colony.
After gaining support from the United States and achieving domestic economic reform, Japan was able to soar from the s to the s.
Japan, Postwar Period: Selected full-text books and articles
Furthermore, Japan also completed its process toward industrialization, and became one of the first developed countries in East Asia. The Japanese Economic Yearbooks from to witnessed the significant increase. In , the year book said: the Japanese economy in thus made an advance more rapidly than previously expected.
The reasons for Japan to complete industrialization are also complicated, and the major characteristic of this time is the influence of governmental policies of the Hayato Ikeda administration, vast consumption, and vast export. In , the economic system MITI had cultivated from to came into full effect. Prime Minister Hayato Ikeda , who Johnson [ who?
Since there was a shortage of capital in Japan at the time, industrial conglomerates borrowed beyond their capacity to repay, often beyond their net worth, causing city banks in turn to over-borrow from the Bank of Japan.
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This gave the national Bank of Japan complete control over dependent local banks. The system of over-loaning, combined with the government's relaxation of anti- monopoly laws a remnant of SCAP control also led to the re-emergence of conglomerate groups called keiretsu that mirrored the wartime conglomerates, or zaibatsu.
Led by the economic improvements of Sony businessmen Masaru Ibuka and Akio Morita , the keiretsu efficiently allocated resources and became competitive internationally. At the heart of the keiretsu conglomerates' success lay city banks, which lent generously, formalizing cross-share holdings in diverse industries.
The keiretsu spurred both horizontal and vertical integration , locking out foreign companies from Japanese industries.
Keiretsu had close relations with MITI and each other through the cross-placement of shares, providing protection from foreign take-overs.
Keiretsu also fostered an attitude shift among Japanese managers that tolerated low profits in the short-run because keiretsu were less concerned with increasing stock dividends and profits and more concerned about interest payments. Approximately only two-thirds of the shares of a given company were traded, cushioning keiretsu against market fluctuations and allowing keiretsu managers to plan for the long-term and maximize market shares instead of focusing on short-term profits. The Ikeda administration also instituted the Foreign Exchange Allocation Policy, a system of import controls designed to prevent the flooding of Japan's markets by foreign goods.
MITI used the foreign exchange allocation to stimulate the economy by promoting exports, managing investment and monitoring production capacity. In , MITIs revised the Foreign Exchange Allocation Policy to promote domestic industries and increase the incentive for exports by revising the export-link system. A later revision based production capacity on foreign exchange allocation to prevent foreign dumping.
During the time of reconstruction and before the oil crisis , Japan managed to complete its industrialization process, gaining significant improvement in living standards and witnessing a significant increase in consumption. The average monthly consumption of urban family households doubled from to The consumption in daily necessities, such as food and clothing and footwear, was decreasing. Contrastingly, the consumption in recreational, entertainment activities and goods increased, including furniture, transportation, communications, and reading.
The period of rapid economic growth between and paved the way for the Golden Sixties, the second decade that is generally associated with the Japanese economic miracle. Ikeda lowered interest rates and taxes to private players to motivate spending.
Economic history of Japan
In addition, due to the financial flexibility afforded by the FILP, Ikeda's government rapidly expanded government investment in Japan's infrastructure : building highways , high-speed railways , subways , airports , port facilities, and dams. Ikeda's government also expanded government investment in the previously neglected communications sector of the Japanese economy.
Each of these acts continued the Japanese trend towards a managed economy that epitomized the mixed economic model. Besides Ikeda's adherence to government intervention and regulation of the economy, his government pushed trade liberalization. By April , trade imports had been 41 percent liberalized compared to 22 percent in Ikeda planned to liberalize trade to 80 percent within three years.
His plans however met severe opposition from both industries who had thrived on over-loaning and the nationalist public who feared foreign enterprise takeovers.
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The Japanese press likened liberalization to "the second coming of the black ships ," "the defenselessness of the Japanese islands in the face of attack from huge foreign capitalist powers," and "the readying of the Japanese economy for a bloodstained battle between national capital and foreign capital. Ikeda's motivations were purely pragmatic and foreign policy based, however. He moved toward liberalization of trade only after securing a protected market through internal regulations that favored Japanese products and firms.
Ikeda also set up numerous allied foreign aid distribution agencies to demonstrate Japan's willingness to participate in the international order and to promote exports. The creation of these agencies not only acted as a small concession to international organizations, but also dissipated some public fears about liberalization of trade.
By the time Ikeda left office, the GNP was growing at a phenomenal rate of It postulated that Asian nations will catch up with the West as a part of a regional hierarchy where the production of commodity goods would continuously move from the more advanced countries to the less advanced ones.
The paradigm was named this way due to Akamatsu's envisioning this pattern as geese flying in unison with Japan being an obvious leader. In , the first oil-price shock struck Japan oil crisis.
The price of oil increased from 3 dollars per barrel to over 13 dollars per barrel.
Despite being seriously impacted by the two oil crises, Japan was able to withstand the impact and managed to transfer from a product-concentrating to a technology-concentrating production form. The transformation was, in fact, a product of the oil crises and United States intervention.
Since the oil price rose tenfold, the cost of production also soared. After the oil crises, to save costs, Japan had to produce products in a more environmentally-friendly manner, and with less oil consumption. The biggest factor that invited industrial changes after the oil crises was the increase in energy prices including crude oil.
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Another factor was the friction between the United States and Japan, as Japan's rapid economic growth could potentially harm the economic interests of the United States. Japan attempted to expand international markets through the appreciation of the Japanese yen, yet they over-appreciated, creating a bubble economy. The Plaza Accord was successful in reducing the U. According to some scholars, no other governmental regulation or organization had more economic impact than MITI.
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The extent of the policy was such that if MITI wished to "double steel production, the neo- zaibatsu already has the capital, the construction assets, the makers of production machinery, and most of the other necessary factors already available in-house". The Ministry coordinated various industries, including the emerging keiretsu , toward a specific end, usually toward the intersection of national production goals and private economic interests. MITI also boosted the industrial security by untying the imports of technology from the imports of other goods.
This element of technological control allowed it to promote industries it deemed promising.
Japan economy after the war is over book
The low cost of imported technology allowed for rapid industrial growth. Productivity was greatly improved through new equipment, management, and standardization.
Power over the foreign exchange budget was also given directly to MITI. MITI's establishment of the Japan Development Bank also provided the private sector with low-cost capital for long-term growth.
The Japan Development Bank introduced access to the Fiscal Investment and Loan Plan, a massive pooling of individual and national savings. At the time FILP controlled four times the savings of the world's largest commercial bank. With this financial power, FILP was able to maintain an abnormally high number of Japanese construction firms more than twice the number of construction firms of any other nation with a similar GDP. Coincidentally, the conclusion of the economic miracle coincided with the conclusion of the Cold War.
While the Japanese stock market hit its all-time peak at the end of , making a recovery later in , it dropped precipitously in The year of the conclusion of the Japanese asset price bubble coincided with the Gulf War and the dissolution of the Soviet Union.
Japan - The Fading Economy
From Wikipedia, the free encyclopedia.