Japan's Economy From 1972 To 1989

The economy of Japan grew rapidly in 1972 until 1989. It was known as the Japanese asset price bubble or Bubble Economy, which was represented high economic dominance of Japan. During the Bubble Economy, Japan was considered as rising force in the world of economy. Japan’s economic power was growing high to the point the whole world was paying attention to economy movement of Japan. However, it all went downhill in 1989, when the economic bubble disappeared. Then Japan entered whole era in 1989 and it is also known as Lost Decades. There was significant change between from 1972 to 1989 in Japan. Basically Japan was dominant force until 1989, and then Japan entered the era of uncertainty. Japan’s view about their nation changed due to economic …show more content…
During the World War II, Japan’s political system was dictation under military government. Also, the government forced totalitarianism on Japanese people. This means people had to follow whatever the government ordered without reasoning or opposition. After the war, United States of America occupied Japan and tried to influence Japan with democratic political system. However, when America stopped occupation of Japan, Japanese political system didn’t have much change as America thought. Japanese people had no problem following what the government orders them to do. Japanese government still able to lead like in World War II and they wanted to grow their economy fast as possible. Then the Japanese government decided to focus their support of industries such as automobiles. Then Japanese companies got almost full support from the government and banks as well. Companies of Japan were able to borrow money from banks without a problem. Then it leads to growth of capital of companies so they were able to expand their …show more content…
Gordon explained about poverty of Japan. Gordon says, “The emergence of groups dubbed the “new poor” alongside the “new rich”, did not all point in the same direction.” (Gordon, 314) Japan was facing new class in their society which was never happened before. Then it led to developing a gap between people by their income and social status. Economy of Japan had dramatic change during “the lost decade.” It started when stock market started to crash in 1989. Before 1989, stock market was one of the biggest profitable business in Japan but it crashed after disappearance of price bubble of Japan. After that, price of real estate such as land dropped dramatically as well. Then it led to collateral damage of economy of Japan. Then it lead to recession, industrial production, construction starts and retail business started to fall. Japan’s economy growth stopped and it only led to decreasing of economic growth. The Japanese government tried to recover economic disaster by regulating financial markets. Also, they passed a Financial Revitalization Law, which is about creating Financial Reconstruction Commission (FRC). Then FRC allowed rebuild the banking system and helped banks to collect uncollected debts as well. However, it didn’t exactly helped the falling of economy that already