Postwar Japanese Economy: Lessons of Economic Growth and the Bubble Economy / Edition 1

by Mitsuhiko Iyoda

Overview

Since the end of World War II, the Japanese economy has seen rapid changes and remarkable progress. It has also experienced a bubble economy and period of prolonged stagnation. The book seeks to address three major questions: What kind of changes have taken place in the postwar years? In what sense has there been progress? What lessons can be drawn from the experiences?

The book is organized as follows: It begins with an overview of the postwar Japanese economy, using data to highlight historical changes. The four major economic issues in the postwar Japanese economy (economic restoration, rapid economic growth, the bubble economy and current topics) are addressed, with particular focus on the meaning of economic growth and the bubble economy. The next chapters examine the important economic issues for Japan related to a welfare-oriented society, including income distribution, asset distribution, and the relative share of income. Another chapter deals with the household structure of Japan, the pension issue, and the importance of the effect of demographic change on income distribution. The final chapter gives a brief summary, examines quality of life as a lesson of this research, and briefly outlines a proposal for a basic design towards achieving a high satisfaction level society.

This book will be of interest to economists, economic historians and political scientists and would be useful as a text for any course on the Japanese economy.

Product Details

ISBN-13:	9781441963314
Publisher:	Springer New York
Publication date:	08/17/2010
Edition description:	2010
Pages:	157
Product dimensions:	6.10(w) x 9.25(h) x 0.02(d)

Table of Contents

1 Introduction 1

1.1 General View of the Subject 1

1.2 Overview of Postwar Japan 2

1.2.1 Political Landscape 2

1.2.2 Economic Landscape 7

1.3 Economic Landscape by Period 8

1.3.1 Recovery Period 8

1.3.2 Rapid Economic Growth Period 8

1.3.3 Positive Effects (Economic Results) 9

1.3.4 Negative Effects 10

1.3.5 Moderate Economic Growth Period 10

1.3.6 Stagnation Period 11

1.4 Toward a Welfare-Oriented Society: Some Lessons from Rapid Economic Growth and the Bubble Economy 12

1.5 Quality of Life in the Mature Society 13

1.6 The Plan 13

2 Historical Changes of the Japanese Economy 15

2.1 Postwar Labor Force Status 15

2.2 Price Increase 17

2.3 Income and Income Distribution 18

2.3.1 Income 18

2.3.2 Income Distribution 19

2.4 Structural Changes 20

2.4.1 Production by Industry 20

2.4.2 Labor Force by Industry and Status in Employment 20

2.5 International Concern 23

2.5.1 Exchange Rate 23

2.5.2 Trade Balance and Foreign Investment 23

3 Recovery Period (Reforms, Social and Political Changes, and Economic Policy) 27

3.1 The Occupation 27

3.2 Important Reforms 28

3.2.1 Antitrust Measures 28

3.2.2 Land Reform 29

3.2.3 Labor Reform 29

3.2.4 Tax Reform 30

3.3 Other Drastic Social and Political Changes 31

3.3.1 Education System 31

3.3.2 Political System 32

3.4 Economic Policy (1945-1950) 32

3.4.1 Government Policy 33

3.4.2 The Dodge Plan 34

4 Rapid Economic Growth 37

4.1 Some Outstanding Facts 37

4.2 General Background 37

4.2.1 Political Background 38

4.2.2 International Background 40

4.2.3 Domestic Business Background 40

4.3 Some Reasons for the Rapid Economic Growth 41

4.4 Government Policy 42

4.4.1 Macroeconomic Planning 42

4.4.2 Industrial Policy 46

4.4.3 Foreign Economic Policy 46

5 Results of the Rapid Economic Growth: Positive Effects 49

5.1 General Economic Results 49

5.2 Spreading Rate of Durable Consumer Goods, and Others 49

5.2.1 Spreading Rate of Durable Consumer Goods 49

5.2.2 Class Consciousness 50

5.2.3 Engel Coefficient 51

5.3 Social Security 52

5.3.1 Livelihood Protection 52

5.3.2 Health Insurance and Pension 53

5.4 Infrastructure (Social Overhead Capital) 53

5.5 Income Distribution 55

6 Results of the Rapid Economic Growth: Negative Effects or Distortions 57

6.1 Social Imbalance 57

6.2 Concentration to Metropolitan Areas 57

6.3 Environmental Disruption 59

6.3.1 General Background 59

6.3.2 Symbolic Examples 60

6.3.3 Countermeasures Taken by the Government 61

6.3.4 Antipollution Litigations, Standards, and Investment 62

6.4 Inflation and People Left Behind by the Advancing Times 63

6.4.1 Inflation 63

6.4.2 People Left Behind by the Advancing Times 64

7 Bubble Economy and Its Generation 69

7.1 Speculative Bubbles 69

7.1.1 Land and Stock Prices 69

7.1.2 Capital Gains and Losses 71

7.2 Backgrounds 72

7.2.1 Trade Imbalance 72

7.3 The Triggering Role of Monetary, Fiscal, and Other Policies 74

7.4 A Critical Factor 76

7.5 Economic Cost of the Bubble in the Bubble Economy 78

8 Bursting the Bubble and Its Consequences 81

8.1 The Process of Bursting the Bubble 81

8.1.1 Domestic Ground 81

8.1.2 International Ground 82

8.2 Consequences of Bursting the Bubble 82

8.2.1 Accelerated "Hollowing Out" 82

8.2.2 Nonperforming Loans in Japanese Banks 83

8.2.3 Outstanding Government Bonds (GB) 88

8.3 Causes of Prolonged Stagnation 89

8.3.1 Stock Adjustments 90

8.3.2 Adjustment to Worldwide Globalization 91

9 Toward a Welfare-Oriented Society: Some Lessons from Rapid Economic Growth and the Bubble Economy 95

9.1 Weaknesses of the GNP (Applied to GDP) Concept 96

9.1.1 Market Failures in the Measurement of GNP 96

9.1.2 Distortions or Limitations of the GNP Concept (from the Viewpoint of Welfare) 96

9.2 Toward a Welfare Viewpoint 98

9.2.1 NNW and the Questions 98

9.2.2 NNW and Some Estimates 98

9.2.3 Social Imbalance 99

9.3 Further Development 100

9.3.1 The GPI 100

9.3.2 Social Indicators 101

9.3.3 Measurement of Happiness (Happiness Research) 101

9.4 GDP, GPI, and Happiness Research 102

9.5 Some Lessons from the Bubble Economy 103

9.5.1 Overview 103

9.5.2 Some Lessons 105

10 Income and Asset Distribution, and the Relative Share 109

10.1 Income Distribution 109

10.1.1 Inverse U-Shaped Hypothesis 109

10.1.2 Japanese Case 110

10.1.3 International Comparison 111

10.2 Asset Distribution 112

10.2.1 Financial and Physical Assets 112

10.2.2 Some Properties of Asset Distribution 112

10.3 Relative Share of Income 114

10.3.1 Estimates 114

10.3.2 Properties of the Relative Share of Labor 117

10.3.3 Macroeconomic Explanation 118

10.3.4 Remaining Questions 118

11 Households and Pension 121

11.1 The Japanese Households: Data 121

11.1.1 Data 121

11.2 The Structure of the Japanese Household 122

11.2.1 Structural Changes 122

11.2.2 Current Household Structure 124

11.3 Pension 126

11.3.1 History 126

11.3.2 Serious Concerns 127

11.3.3 A Possible Solution 128

12 Toward the Quality of Life in the Mature Society (Summary and Lessons) 131

12.1 A Brief Summary 131

12.2 Toward a Welfare-Oriented Society 134

12.2.1 Enhancing GPI 134

12.2.2 Some Important Factors Dealt with in Chapters 10 and 11 135

12.3 Quality of Life in the Mature Society 136

12.3.1 Systemic Design 136

12.3.2 Some Important Concerns 137

12.3.3 International Concern 138

References 141

Data Sources 145

Index 149