The Bursting of the Japanese Bubble
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The present global recession comes on the heels of Japan?s ?Lost Decade? that saw one of the world?s great economies moving rapidly into the financial abyss. While the economics of the crisis are relatively straightforward and generally accepted by experts, there remains no definitive synthesis of cultural and historical factors that contributed to the economy?s lost decade. Japan?s incredible post-war growth made it the darling of economists and historians who praised the nation?s rapid industrialization and highly efficient economy. Despite the plethora of literature in support of Japan?s ?miracle,? skeptics published their own body of literature, which vaguely predicted the economic difficulties that Japan encountered beginning in 1989 with the bursting of its stock and real estate bubbles. The highly rigid and traditional nature of Japanese society greatly informed the growth of its post war economy, enabling it to achieve significant expansion, but ultimately handicapping reform. The inability of companies to effectively adapt to market conditions and the unwillingness of regulators to intervene in a prompt manner contributed to the ?lost decade? and severe economic distress in the country. Examining the cultural underpinnings of Japanese business and societal attitudes toward the economy, as well as the various economic components of the crisis provides a more holistic and meaningful understanding of the lost decade.