The Japanese Economy

Paper Summary:

This paper explains that Japan's economy leading up to the 1990's was one of great prosperity and stability; however, following the speculative boom in the 1980s, the Japan's asset price bubble burst in the early 1990s, which lead to economic recession. The author points out that one important key to Japan's sustained economic recovery is the restoration of a healthy, functioning banking sector. The paper concludes that the central causes of Japan's recovery are structural and material enough that, failing some major problem, the recovery of the Japanese economy will continue at a slow and stable rate. Illustration.

From the Paper:

"Industrial output in 2005 was at the highest level since 2000, with the December figure rising for the fifth straight month after seasonal adjustments. During this time the unemployment rate fell for the third year in a row to just 4.4%, with the number of job seekers making the number of job offers for the first time in more than 13 years. It is due to these factors that Japanese consumers are increasing spending. The consumption propensity of wage-earning households, which is measured by the ratio of household spending to disposable income, registered the highest level in 15 years, at 74.7 percent in 2005. However, there is a problem of declining consumerism in Japan, as the country begins to feel the effects of its aging population."

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