An introduction to the Japanese economy based on a comparative perspective and an analytic approach grounded in mainstream economics. It compares Japan with the United States in terms of economic performances, institutions and government policies and also scrutinizes the Japanese economy.

Japan remains one of the dominant economic powers. Yet the Japanese economy is one of the most misunderstood phenomena in the modern world. Conventionally, Japan is presented as the exception to mainstream economic theory: an exception to the standard models of modern economics. This book demolishes that notion, bringing the full analytical power of economic thought to all aspects of the most dramatic economic success story in recent times. David Flath concentrates on four main themes: Japan's economic growth and development; Japan's integration with the world economy; Government policies and their effects; Economic institutions and practices. By applying common economic tools such as the Solow growth model, Modigliani's life-cycle model of saving, Becker's theory of investment, Samuelson's theory of revealed preference, Coase's exposition of the problem of social cost, and the modern theory of industrial organization, this book shows that the mainstream principles of economics apply in Japan as successfully as they do elsewhere. Revised and updated to take account of recent developments in Japanese banking and macroeconomics, this book is an indispensable resource for students and instructors alike. Lucid explanations and comprehensive and rigorous analysis make it natural choice for anyone interested in comprehending the rise of the Japanese economy.

Japan has many unique strengths, but it also faces numerous challenges, many of which are related to population ageing. Rapid demographic change is projected to reduce Japan’s population by one-quarter by 2060 while increasing the share of elderly people from 29% of the total population to 38%, which would be the highest share among advanced countries. This book analyses the Japanese economy and the challenges it faces, and suggests policies to promote wellbeing, high living standards, fiscal sustainability, social inclusion and environmental sustainability. The book’s 24 chapters focus on key aspects of Japan’s economy, including the labour market, innovation, education, women in the workforce, corporate governance, small and medium-sized enterprises, the service sector, agriculture, fiscal and monetary policy, income distribution and policies to address climate change. The volume aims to increase understanding of Japan, the world’s third-largest economy and a key player in the global economy. It will assist policymakers and serve as a resource for academics and students of economics and public policy. As Japan is a front-runner in population ageing, the book’s analysis and policy recommendations are highly relevant to other countries that are, or soon will be, facing similar challenges.

The second edition of a comprehensive account of all the major aspects of the Japanese economy, substantially updated and expanded. This textbook offers a comprehensive, rigorous but accessible account of all the major aspects of the Japanese economy, grounding its approach in mainstream economics. The second edition has been extensively revised and substantially updated, with new material that covers Japan's period of economic stagnation between 1991 and 2010. The first edition, published in 1992, focused on Japan as a success story of catch-up economic development; this edition reflects the lessons learned from Japan's Lost Two Decades. After presenting the historical background, the book begins with macroeconomics, studying growth and business cycles. It then covers essential policy issues, with new material that takes into account the Japanese banking crisis of 1997–1998 and the global financial crisis of 2008–2009, discussing financial regulation, monetary policy, and fiscal policy. It goes on to examine saving, demography, and social security in light of Japan's ongoing demographic transition; industrial organization; labor markets; international trade and international finance; and the Japan–U.S. relationship. A new chapter offers a detailed analysis of the Lost Two Decades, synthesizing and applying concepts discussed in previous chapters and offering insights into such issues as successful catch-up growth, demographic shifts, and credit booms and busts.

The Japanese economy is currently at a crossroads and the embarrassing situation the country faces today is even worse than the Meiji restoration of 1868, the defeat after World War II in 1945 and the yen appreciation after the Plaza Agreements of 1985. Indeed, the traditional Japanese model is doomed to failure, mainly due to economic and industrial structures that are inappropriate towards increasing globalization, liberalization and deregulation. However, Japanese-style industrial capitalism is in this work compared to the economic and social models of other developed countries and this enables us to point out the path the Japanese economy may take in the 21st century in order to survive.

During the rapid growth period of the Japanese economy, from the mid-1950s to the mid-1970s, the economic system that became entrenched in Japan -- the so-called Japanese-style capitalism -- was based on the government-business-bureaucracy triad. Although its distinct features survived the subsequent two decades of slow growth, there are many indications that the Japanese economy is once again struggling to transform itself. These translations from the Japanese economic literature expertly address this transformation.

The internationalization of the J apanese economy, or the shift from an export-Ied to a domestic demand-Ied growth, is one of the important cu ne nt developments in the world-economy. lt involves the interaction of a variety of economic, social and cultural factors which many observers outside of Japan need to appreciate in order to understand what the process entails. Drs. Higashi and Lauter have written a book which is providing de tailed insight into the policy alternatives which the Japanese government has chosen to achieve the objectives of the internationalization process. Moreover, they have also analyzed the potential problems which sur round the implementation of the complex policies. I believe that their book is a valuable addition to both the academic and the generalliterature on Japan's efforts to change its role in the world economy and to contribute to the well-being of people everywhere. Michio Watanabe Tokyo, March 1987 Minister of International Trade and Industry December 1985-July 1986 Minister of Finance July 1980-November 1982 Xl The Internationalization Of The Japanese Economy 1 THE PATH TO ECONOMIC POWER Japan, known around the world as a smalI, resource-poOf island country, has experienced a greater than tenfold increase in its gross national product (GNP) in real terms since 1950.

This work proposes a new approach to macroeconomics which draws upon the experience of the Japanese economy. The approach is similar to the Old Keynesian view: it rejects the Walrasian approach, and singles out real demand as the fundamental determinant of output in the economy as a whole. However, by maintaining that real demand constraints are important not only in the short-run, but in the long-run as well, it goes beyond what is normally understood as the Keynesian approach. It is also very different from the New Keynesian Economics; in particular, it regards the rigidity of nominal wages/prices as of secondary importance. The work is extensively illustrated by almost 200 figures and tables of data.

The book examines the effect of various public policies on economic performance in Japan. Various public policies include tax policy, regulation, macroeconomic policy, labour policy and some others. Many fields regarding economic performance are covered in this book: savings, portfolio choice, housings, investments, cost of capital, taxes, unemployment, wages, inequality, etc. Emphasis is placed on the examination of the two factor markets, namely, the capital and labour markets in Japan.