Japan’s Great Stagnation
Show Less

Japan’s Great Stagnation

Forging Ahead, Falling Behind

W. R. Garside

This timely book presents a critical examination of the developmental premises of Japan’s high-growth success and its subsequent drift into recession, stagnation and piecemeal reform. The country, which within a few decades of wartime defeat mounted a serious challenge to American hegemony, appeared incapable of fully adjusting to shifting economic circumstance once the impulses of catch-up growth and the good fortune of an accommodating international environment faded.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 10: ‘Lost Decades?’ Japan’s Political Economy in the New Millennium

W. R. Garside


It is not our purpose here to provide a detailed macroeconomic or microeconomic analysis of Japan’s economic fortunes since the turn of the century. We identify instead some of the broader changes that occurred within Japan before the dramatic turnaround in the international financial and economic climate from 2007–08 onwards to indicate the extent to which the experience of recession and stagnation during the 1990s subsequently affected the content and purpose of the country’s distinctive political economy during the early years of the new millennium. Emerging from the ‘Lost Decade’ The aberration in Japan’s 1990s recession had not been the behaviour of growth – the country had witnessed a series of recoveries aborted by policy errors – but rather the persistence of deflation and low aggregate demand. Japan had not been obliged during its ‘lost decade’ to reallocate productive resources across export sectors because prospects there had not fundamentally deteriorated.1 The economy had not collapsed. What proved decisive was the worsening domestic economic situation from 1997, in the midst of a banking crisis, a credit crunch, a widening in the gap between actual and potential output, a curb on the effectiveness of fiscal stimulus and falling confidence. It is arguable that by the turn of the century it was too soon to know just how long a shadow the experiences of the previous decade had cast. Nor was it clear whether the lessons of recession and stagnation would usher in fundamental reform rather than a recalibration of the country’s...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.