The Economy Of Japan After World War II

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The end of 1945 was a bleak year in Japanese history. The war had just

ended, leaving a devastated and ashamed Japan in its wake. Importation was

almost non-existent, the economy was in tatters, and the future did not seem

very bright. But within the decade, a miracle happened. The Japanese economy,

previously broken and battered from years of war, actually recovered. Since they

were not allowed to have a military, Japan could afford to spend more on

economic growth, which is exactly what they did. They poured billions of dollars

into their economy, maintained low interest rates, and, by investing heavily in

both the technology and motor industries, increased their GDP (Gross domestic

product) from a devastated, post-war low to the …show more content…

From post-war

Japan up until the late 1980’s, people looked to this tiny island as a shining

example of capitalism, proving to the world that with the right economic policies

and a few powerful allies, a beaten-down and devastated nation, could completely

recover and wield one of the largest GDP’s in the world.

But nothing lasts forever. At the end of the 1980’s, disaster struck. The

stock market crashed, GDP fell, and during the decade that followed, the

economy collapsed into a depression: “During 1980-90, Japan's annual real GDP

growth rate was 4.6% but declined to 1.2% in the 1990s” . Though the value of

the yen increased, the Japanese population was not investing any money into

GDP growth and everyone was pulling their earnings out of the banks. All the yen

that Japan had spent to recover came back to bite them, and their economy was

plunged into debt. Many industries and companies that had been beneficial to …show more content…

Cost of living, on the other hand, has

continued to rise. The population is getting older, putting additional stress on the

budgetary infrastructure, and nervous investors are starting to lose faith in the

system. While the Japanese economy is still the third largest in the world,

outdated systems, an aging culture, and new economic problems have halted

growth and threatened Japan’s position on the world economic spectrum.

The Japanese economic system is outdated and based more on growing a

smaller economy than on maintaining a large one. Its solutions to economic

problems cost more than the country can afford. For example, Japan’s solution to

unemployment was to create public construction and cleaning jobs , a method

that works for smaller countries but is incredibly costly for larger ones, a fact

proven by the New Deal during America’s Great Depression, which dramatically

increased the national debt. According to Yutaka Harada, a journalist for the

Japanese Journal of Political Science: “It would be much better to give direct

assistance to those in need”. Plagued by formulaic systematic thinking and a lack

of competitive spark, The Japanese system lost much of its power.

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