Essays on The Heisei Recession in Japan Essay

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The paper “ The Heisei Recession in Japan” is affecting the essay on macro & microeconomics. Financial and economic recessions have characterized global economies in the 21st century with the majority of them recovering from them only to be stricken again although in different parts of an economy’ s history. For instance, the 2008 global financial recession was likened to the 1930s Great Depression. Financial and economic recessions are linked with massive rates of unemployment and job cuts, high rates of inflation, crashing stock and share prices, high levels of fluctuations in the international exchange rates, rising interest rates, and rising prices on energy and other consumer goods such as food as indicated by Shibata (2004, p. 86). In Japan, the impact of the 1990s Heisei recession still remains to date as Japan has not fully recovered from the after-effects of the downturn as highlighted by Kuttner & Posen (2001, p. 93). The Heisei recession saw stock prices drop to very low margins, property values declining rapidly with the growth of the economy that had been ignited by the importation of international technology, and increased population growth rates stagnated and eventually regressed as discussed by Shirakawa (2010, p. 487).

With falling land values to more than seventy percent, the value of assets nosedived to more than ten trillion US dollars (Millward & Morrison, 1997, p. 8). Many contributing factors and elements have been cited to culminate in the crisis. The impact was severe, felt in all sectors of the economy including Japanese banks at the time. This report seeks to critically, discuss the statement, “ Every major industrialized country has had one, or more than one, disastrous financial crisis, usually following from a period of deregulation and adjustment to free-market forces.

The difference in Japan is that for far too long the authorities did nothing about it. This failure to act was a major contributor to the depth of the Heisei Recession” .Causes of the Heisei Recession and its prolonged effects in JapanAs earlier mentioned, there are varied underlying factors and elements that facilitated the Heisei recession in Japan, which was accompanied by the collapse of the Bubble economy.

References

Amyx, J. A. 2004. Japan’s Financial Crisis: Institutional Rigidity and Reluctant Change. Princeton: Princeton University Press.

Hamada, K. 2003. The Heisei recession: an overview. The ESRI international Forum. Savage, J.D. 2000. A decade of deficits and debt: Japanese fiscal policy and the rise and fall of the fiscal structural reform Act of 1997. Virginia: Department of Government and Foreign Affair.

Ihori, T., Nakazato, T., & Kawade, M. 2003. Japan’s fiscal policies in the 1990s. London: Blackwell Publishing.

Koo, R. C. 2008. Lessons from Japan’s lost decade. Singapore: John Wiley and Sons.

Kuttner, K.N., & Posen, A.S. 2001. The Great Recession: Lessons for Macroeconomic Policy Brookings Papers on Economic Activity, Vol. 2001, No. 2, pp. 93-160

MacLean, B.K. 2006

MacLean, B.K. 2006. Avoiding a great depression but getting a great recession. International Journal of Political Economy, vol. 35, no. 1, pp. 84–107, DOI 10.2753/IJP0891-1916350105

Millward, H., & Morrison, J. 1997. Japan at Century's End: Changes, Challenges and Choices. San Francisco: University of California.

Muramatsu, M. 2007. The slow government response to Japan’s bank crisis: A principal – Agent Analysis. San Francisco: University of California.

Shibata, T. 2004. The American Great Depression and the Japanese Heisei era Depression compared- from an institutional approach. Seoul Journal of Economics, Vol. 17. No.1

Shirakawa, M. 2010. Revisiting the philosophy behind the Central Bank Policy. International finance, 13:3, pp 485-493, DOI: 10.1111/J.1468-2362.2010.01271.x

Suwanakul, S. 2005. What’s wrong with Japan’s economy. The Journal of American Academy of Business, No.2

Uematsu, T. 1999. Japan’s decade long recession. Kobe University Economic Review, 45.

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