GEB 228 Finance and Politics : Public Interest and Private Manipulation Does plaza accord lead to the result of lost decade in Japan? Fan Shuk Man 1111325 Tse Hung Kit 1113402 The lost decade refers to an economic downturn from around 1991-2001 in Japan. In this period Japan faced economic recession, serious unemployment rate and low GDP growth. Many scholars criticized that the Plaza Accord was the main contributor to Japan’s lost decade. We agree that Plaza Accord was the main reason toward Japan’s lost decade. In this paper we will investigate the impact of Plaza Accord and its relationship with Japans’ economic depression and how others factors contribute to Japans’ lost decade. Our paper will be divided into 4 sections. The first part is the background and the content of plaza accord. The second part is the literature review related to our research topic. The third part is the impact of plaza accord and its relationship with the economic recession. Last but not least is how other factors contribute to economic depression. The background and content of Plaza Accord In 1960s and 1970s Japan economy experienced a prosperous period of development, economic growth rapidly and totally got rid of the negative impact of Second World War. During this golden period the export rate increased dramatically and Japan accumulated a large trade surplus, those trade surpluses are mainly to U.S. Japan became the world’s largest trade surplus country. The trade surplus problem activated the trade conflict between U.S. By the 1980s, the trade conflict between U.S. and Japan intensified. U.S believed that undervalue of yen was the reason of Japan's huge trade surplus. In order to impr... ... middle of paper ... ...rong as U.S. The graph revealed that the Nikkei index kept rising after 1985. In December 29, 1989, the Nikkei index reached the highest 38,957.44 points. Aftermath, the stock market began a downward spiral in 1990 .The bubble economy burst in 1991, economic growth stalled and factories going bankrupt. The graph shows that the real GDP growth rate between Japan and U.S, From 1960-1990, Japan experienced high GDP growth, in 1961-70, the growth rate is 9.3 %, a half more than U.S, but after the burst of bubble economy, the economic growth only 1.4%, nearly the lowest in developed country. The key points is that after Plaza Accord in 1985, Japan lost the basic source of its economic growth- Export. To sum up, the Plaza Accord was the turning point of Japan’s economy, it trigged out many unexpected result and the wrong policy followed .
In the early 1800’s, Japan had blocked off all trade from other countries. Foreign whaling ships could not even reload or repair their ships in Japan territory. This offended many other countries. In 1852, Matthew Perry was sent to Japan to negotiate open trade. Japan felt threatened by the United States, and gave in to their demands. Japan was frightened by their stipulations, and immediately began to reform. They developed a new education system that was similar to America and Europe’s. They also developed a Western style judiciary system.
This investigation will examine ways in which the US economy improved during the second World War and what caused these improvements. World War Two was a turning point for the American economy from the end of the Great Depression to the start of an economic boom. The reasons for this economic improvement are still debated today. This investigation will look at the economic indicators before, during, and after the war. It will also consider the two main arguments for the cause of the sudden economic growth and determine which one seems most probable.
the world today. It has exhibited many of the signs of a high growth economy,
The two countries reunified in 1990 and the reunification caused a decrease in Germany’s economic strength. This was due largely to Eastern Germany’s reliance on the Soviet Union for economic strength and stability. This remained true from 1991 to 1999 and is reflected in Germany’s average economic growth of 1.8%. Their growth started to increase in 2000 to 3.3%. This was due to the “rise in merchandise exports and foreign direct investment” (Marketline).
After World War 1 Japan had a hard time adjusting to the new world. “While its economy was still primarily agricultural, rapid population growth (to over 80 million) had diminished the amount of land suitable for farming. Many people lived in small houses, lacking running water. In a nation about the size of California, only one of every six acres was farmland. This put great pressure on Japanese government to find more space and land for its people.” (America Enters World War II page 12). Japan attempted to change its agricultural-based economic system to an industrial based system. “But the international system of trade barriers and tariffs, established by the United States and other industrial powers to protect domestic manufacturing, hindered Japan’s industrial expansion.” (America Enters World War II page 13). Many of the materials Japan needed were found in neighboring countries that were controlled by European powers. Japan began to question it’s right to Asian markets and raw materials. “J...
Not only did Carter and Reagan Administrations help cause the Recession, President Clinton helped. “Clinton then established official government poli...
During the last 40 years of the nineteenth century the United States became the worlds greatest economic power. The rapid rate of economic growth happened for a
In the late nineteenth century, Japan’s economy began to grow and industrialize. Because of the scarcity of natural resources in Japan, they relied on imported materials from other countries. In September 1940, the United States placed an embargo on Japan by outlawing exports of steel, iron, and aviation fuel, because Japan took over north...
Do to the great depression of 1930 the world was economically on its knees throughout most of the 30’s and early 40’s. This had great impacts on trades between many countries to include the US and Japan. Prior to this point, the US had been primarily importing silk from the Japanese and we had been exporting oil and coal commodities to them. The Japanese had felt it was a better option to seek elsewhere for the needed resources to increase their military footprint at the brink of World War II. Already at the verge of war with the Chinese, in 1937 the Japanese decided to force a war at Manchuria, China. In their minds this would be an outlet to seek those resources.
risen to seventh in the world, and its economy is growing at over nine percent
The beginning of World War II would prove to be the factor that directed America out of the Depression. How ironic, that such a horrifying event could spur an economic rejuvenation.
After the Second World War, Japan experienced an amazing and thriving economy. The United States’ Marshall Plan helped rebuild the Japanese economy and “created an opportunity for Japan to export manufactured products to the increasingly affluent United States” (Colombo). Japan, which was at the time comprised of “zaibatsu,” or financial conglomerates, began competing globally by mastering Western goods, and “selling them back to the West for cheaper prices” (Colombo). By the 1970s and 1980s, Japan had become the global leader in revolutionary electronics, which created an international trend “similar to the Apple iPod and iPhone craze of recent years” (Colombo). During this post World War Two period, “Japan experienced attractive economic growth to place itself as an economic powerhouse” (Tolia). Eventually, this economic miracle would come to an end and create a miserably failing economy for the Japanese. What had happened was that the seemingly perfect economy had secretly been “bubble-forming.” At the end of the flourishing period, the bubble collapsed and caused an economic catastrophe in the housing market, stock market, and financial market in general. In this essay, I will analyze some major causes of the bubble’s formation, and its demise. I will also analyze the Japanese government’s attempt to recover from the catastrophe. Overall, The Plaza Accord, Japan’s economic law, and its corporate structure led to the formation of the bubble, while the government’s attempt of financial deregulation halted the nation from recovery after the bubble’s collapse.
Not only because of Japan’s role in the world’s economy should we take a look at all this. Also because we can learn from Japan.
So, if Japan does not “belong” to Asia, does it belong to some other amorphous collection of nations, namely Europe or the West? Certainly in the modern post-WWII era Japan has seen phenomenal economic growth, even to the point of threatening the US as the primary global economic power during the height of the “bubble economy.” Some credit this success to the changes implemented during the US occupation. Undoubtedly without US assistan...
experiencing growth rates in GDP per head at around 6% to 7% compared to the 2%