1980s Bubble and Bust The Lost Decades Begin. Nixon Shock(s)
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Transcript of 1980s Bubble and Bust The Lost Decades Begin. Nixon Shock(s)
1980s Bubble and Bust
The Lost Decades Begin
Nixon Shock(s)
High Growth to Low Growth
Floating Exchange Rate
US Trade Deficit
Plaza Accord
• France, West Germany, Japan, the United States, and the United Kingdom, to depreciate the U.S. dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets. September 22, 1985 at the Plaza Hotel in New York City.
Plaza Accord
• Little impact on US exports to Japan– US claims “structural impediments” – Trade friction continues
• Trophy real estate purchases– Devalued dollar makes US real estate
attractive to Japanese• Rockefeller Center • Pebble Beach Golf Course• Waikiki Hotels
Frightening Japan
• Japan [nation as a whole] is buying up ….
• the Japanese [nation as a whole] are buying up ….
• Companies less likely to be named than in European case– Study by SF correspondent Charles Burress– European investment much larger
Frightening Japan
• UK reaction much different– Japanese investment welcomed especially
compared to German– US paranoia satirized in Bill Emmott,
Japanophobia– Contrast with Fallows, Containing Japan and
Crichton Rising Sun
Maekawa Report
Maekawa Report
• Privatization of government owned companies– JNR 日本国有鉄道 Japan National Railways
• Rural lines built for political reasons• Pension burden from use as employer of demobilized military• Union busting
– Work to rule struggles 順法闘争– NTT Nippon Telephone and Telegraph
• Monopoly impeding progress• High charges
– Buy lines to get phone
– Call back services because of high charges
Hollowing Out 空洞化
Offshoring
• Production by Japanese companies of Japanese products outside of Japan– Automobile factories in Thailand, US, UK, etc.– Large political motivation especially in US case– Tariff barriers, local content regulations– Exchange rate fluctuations
• Decline in manufacturing employment in Japan• Local plant closings
Regional Regeneration
• Amusement and theme parks built in towns and cities that had lost their industries
• Yubari 夕張 in Hokkaido – Amusement park to replace coal mines
• City goes bankrupt in 2007
Yubari
Recognition of Stagnation
• Slow in coming– Rising Sun 1992, three
years after stock market crash ending bubble
– Blindside: Why Japan is Still on Track to Overtake the US by the Year 2000 (1995)
Environmental Change
• Rise of China and Korea– Largely ignored by domestic and foreign
commentators until early 2000s– Japanese firms dismissed as “cheap labor”
production of imitative products– Expected “Japanese quality” to preserve
markets
• Aging population
That’s All Folks
• Slides for lectures, readings– www2.gol.com/users/ehk/keio/postwar– ehk.servebeer.com/keio/postwar
• Office hour– None at Keio
• Email– [email protected] [email protected]– Always put “Keio Postwar”, your name, and student n
umber in the subject line of your email– Email can be in Japanese 日本語も使用可能
That’s All Folks
• Slides for lectures, readings– www2.gol.com/users/ehk/saitama/postwar– ehk.servebeer.com/saitama/postwar
• Office hour– None at Saitama
• Email– [email protected] [email protected]– Always put “Saitama Postwar”, your name, and stude
nt number in the subject line of your email– Email can be in Japanese 日本語も使用可能