Economy: From Recovery to Miracle to Lost Decade Explaining the Economic Miracle.
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Transcript of Economy: From Recovery to Miracle to Lost Decade Explaining the Economic Miracle.
Economy: From Recovery to Miracle to Lost Decade
Explaining the Economic Miracle
Explaining “stabilization”
Stability ≠ stagnation or lack of changeHybrid result: mix of promoting,
managing, resisting, change SCAP mobilizes existing constituencies,
shifts balance among them Effectively: land, labor cases Less effect: zaibatsu dissolution,
education, policing Economic recovery also critical
Revival to Miracle [to Lost Decade]
•Low expectations, and devastation, 1945-50
•Economic miracle, 1950-75
•Economic mess [deferred]
The Record of Growth
Bleak era through 1947; modest gains at best through 1950
•priority production: one harbinger of recovery1947, targets iron/steel & coal
•light machinery: cameras, watches, radios, bicyclesand sewing machines
Toward Recovery
•1949-50:Dodge line
Considerable impact on inflation, but no recovery in sightWould it have worked, alone?
Program of radical retrenchment
•1950 Korean war: gift of gods?"special procurements." Worth 590 million dollars in 1951, 800 million each in 1952, 1953. 60% to 70% of all export revenues, 1951-53
The Record of GrowthThe high growth miracle: 1950-90
•10 percent annually, through 1974
•continued moderate, strong growth --> 1990/91
Explaining Growth
international factors
•high international growth
•tripling of international trade
•cheap energy
•accessible new technologies
Explaining Growth
domestic factors
•entrepreneurship
•human capital-- well-educated
•state role: economic bureaucracy MITI Ministry of International Trade and Industry
Explaining Growth
•climate of confidence
•protecting/nurturing
•bailing out
•state role: economic bureaucracy MITI
The Record of Growth
•state role: economic bureaucracy MITI
example: iron and steel industry
•targeting
•capital access
•Joint development and cost sharing:example of BOF license
The Record of Growth
Sum up: the Managed Miraclea convergence of factors
•favorable international environment: US sponsorship and global growth.
•domestic endowments: human capital, entrepreneurship
•and an activist but not oppressively interventionist state, as orchestrator.
Economy: Japan’s “Lost Decade”
Prelude: The bubble era, 1985-90
•Strong GNP: up 55% over the decade
•Gold leaf sushi wrap
•Land prices boom
Economy: Japan’s “Lost Decade”
The bubble bursts: 1991-->