The paper “ Why Japan’ s Prosperity Stalled ” is a breathtaking example of the literature review on macro & microeconomics. The world has made big progress after several decades after World War I and II (Ohno, 2006). However, the history and development of frontrunners of the world war cannot just be wished away. Schaede (2008) claims that today, if the people who lost their lives in the world wars resurrect, the world be surprised by development changes that have happened in Japan, the US, Russia, Italy, UK, France, and Germany since 1945.
However, the path has never been smooth for some of these countries, especially Japan. After Japan had been defeated during World War II, the US and its Allies led the rehabilitation of Japan. The U. S forces led by General Douglas MacArthur ratified extensive reforms touching on economic, social, and political factors. It marked the start of a long journey of economic development (Ohno, 2006). By the end of the 1980s, Japan had succeeded in creating one of the world's strongest and most stable economies. In 1990, everything changed and the economy stagnated in what came to be known as “ the lost decade” .
Based on the information, this essay will explain why Japan’ s prosperity stalled and discuss what “ the lost decade” means in detail. DefinitionAccording to Fukao & Hyeog (2006, p. 197), economic stagnation is an extended time of slow economic development which is often followed by high unemployment or part-time employment. Most times, the growth remains between 2 and 3% and is measured in terms of GDP (Gary & Stern, 2004). Japan is one of the countries which have experienced four decades of prosperity which was succeeded by economic stagnation.
On the other hand, the Lost Decade is the period following the collapse of the Japanese asset price bubble within the economy of Japan (Etsuro, 2009). Overview of Japan’ s economic developmentJapan has changed greatly today and is considered a large economic power and a developed country which holds the third-largest economy in the world based on GDP (Kihara, 2012). Also, the country is the fourth leading economy based on its purchasing power charity, exports, and imports. According to Tsutomu & Hisa (2013, p. 45)
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