Why Did the Japanese Economy Begin to Experience Major Difficulties in the 1990s?
Table of contents
1, Introduction – Background of Japanese economy___________3
2, Collapse of the 'bubble' economy___________________________4
3, A breakdown of a major company financial institution_______5
4, Lost Main Bank _________________________________________5
5, Employment reduction___________________________________5
6, Conclusion______________________________________________6
7, Reference _______________________________________________7
Introduction – Background of Japanese economy
Industry of Japan received the destructive blow by World War II. Policies such as the prioritisation of production system which is tied to major industries. As a result, Japan was hit by serious inflation. Although Japan had faced a great financial burden by the Korean War and many sacrifices were paid, heavy industry of Japan increased tremendously at the time of Koreafs special procurements. Starting with the Jinbu business which started in 1955, high growth was attained centring on the manufacturing industry. Increase of purchasing power by the rise of wages of labourers who recognised the existence of a labour union increased the production by plant-and-equipment investment. This made a capital of foreign currency gained by export, and the economy of Japan accomplished a great expansion. The economic scale of Japan overtook West Germany in 1968 and became 2nd in the world with based on GDP.
The first oil crisis happened in 1973, and Japanese economy became chaotic; the economic growth rate in 1974 was in negative numbers for the first time after the war, and it signalled the end of high economic growth. From the second half of the 1970s, a current account surplus occurred in Japan as current account deficit of United States increased. Remarkable progress of export industries created trade friction between many foreign countries, especially with United States. Then, an economic depression due to yen appreciation occurred by the
1, Introduction – Background of Japanese economy___________3
2, Collapse of the 'bubble' economy___________________________4
3, A breakdown of a major company financial institution_______5
4, Lost Main Bank _________________________________________5
5, Employment reduction___________________________________5
6, Conclusion______________________________________________6
7, Reference _______________________________________________7
Introduction – Background of Japanese economy
Industry of Japan received the destructive blow by World War II. Policies such as the prioritisation of production system which is tied to major industries. As a result, Japan was hit by serious inflation. Although Japan had faced a great financial burden by the Korean War and many sacrifices were paid, heavy industry of Japan increased tremendously at the time of Koreafs special procurements. Starting with the Jinbu business which started in 1955, high growth was attained centring on the manufacturing industry. Increase of purchasing power by the rise of wages of labourers who recognised the existence of a labour union increased the production by plant-and-equipment investment. This made a capital of foreign currency gained by export, and the economy of Japan accomplished a great expansion. The economic scale of Japan overtook West Germany in 1968 and became 2nd in the world with based on GDP.
The first oil crisis happened in 1973, and Japanese economy became chaotic; the economic growth rate in 1974 was in negative numbers for the first time after the war, and it signalled the end of high economic growth. From the second half of the 1970s, a current account surplus occurred in Japan as current account deficit of United States increased. Remarkable progress of export industries created trade friction between many foreign countries, especially with United States. Then, an economic depression due to yen appreciation occurred by the