Postwar Japan's economic boom had a number of factors, including a powerful central government, favorable domestic consumption patterns, and favorable international conditions. Prime Minister Hayato Ikeda, who Johnson[who?] During this time, Japan's industrial production decreased by 20%, as the supply capacity could not respond effectively to the rapid expansion of demand, and increased investments in equipment often invited unwanted results—tighter supply and higher prices of commodities. The Japanese economic miracle is known as Japan's record period of economic growth between the post-World War II era to the end of the Cold War. Two-thirds of its prewar cotton spindles were scrapped by wartime administrators, and bombing and destruction of urban areas had caused a further loss of 20 percent of spinning and 14 percent of weaving capacity". Besides that, the internal factors triggered by government incentives and contribution by private sectors had driven Japan’s economic growth. As the United States was participating in the conflict on the Korean Peninsula, it turned to the Japanese economy for procurement of equipment and supplies because the logistics of shipping from the States soon became a significant problem for the military. For instance, during wartime, "the Japanese cotton industry was brought to its knees by the end of the Second World War. By the 1990s, Japan's demographics began stagnating and the workforce was no longer expanding as it did in the previous decades, despite per-worker productivity remaining high. The period was around 1945 to 1991. 1950s–90s period of rapid economic growth in Japan, Brief introduction to the Japanese economic miracle, Influence of governmental policies: Ikeda administration and, Vast consumption: from survival to recreation, Vast export: Golden Sixties and shift to export trade, Role of the Ministry of International Trade and Industry. After the end of World War II, Japan's economy … After World War II, East Asia was the only region of the world that experienced continual substantial economic growth and no other East Asian country enjoyed more economic success than Japan. In 1975, it was double of the UK's, and 1980, it reached US$1040 billion, roughly 40% of the USA's. The legislation on recruitment contains three components: the restriction placed on regional recruitment and relocation of workers, the banning of the direct recruitment of new school leavers, and the direct recruitment of non-school leavers under explicitly detailed regulations issued by the Ministry of Labour.[6]. Had the country ended the war intact, the economic "miracle" would not have happened. During the economic boom, Japan rapidly became the world's second largest economy (after the United States). The government body principally concerned with industrial policy in Japan was the Ministry of Industry. Keiretsu had close relations with MITI and each other through the cross-placement of shares, providing protection from foreign take-overs. Ikeda's government also expanded government investment in the previously neglected communications sector of the Japanese economy. 3 Introduction 4-5 Impact of WWII 5 Major Problems 5-6 Occupation of Japan 6-10 From Reform to Recovery 10 The Dodge Plan in 1948 10-11 The Korean War Boom 11-12 Economic Miracle 12 Factors for Growth 12-14 Political Factors for Growth 14-16 The Road to Stable Growth 16 Conclusion 16 Endnote 17 Bibliography 18 The Ministry coordinated various industries, including the emerging keiretsu, toward a specific end, usually toward the intersection of national production goals and private economic interests. There were external factors in the form of military protection and financial aid, thus enable the country to recover rapidly. The same goes for Germany, which GNP stood at 68% of the UK's in 1951, while it had obviously been superior to it during its WWII peak. Occupying forces (known as SCAP, or Supreme Command of the Allied Powers) and the outbreak of the Korean War led to a rapid increase in Japanese economic growth. Karel van Wolferen, The Enigma of Japanese Power (New York: Knopf, 1989), pp. The Japanese Economic Miracle refers to a period from post-WWII to the end of the Cold War where Japan’s economy still recorded positive growth. Please help improve it or discuss these issues on the talk page. The keiretsu spurred both horizontal and vertical integration, locking out foreign companies from Japanese industries. According to Knox College Professor Mikiso Hane, the period leading up to the late 1960s saw "the greatest years of prosperity Japan had seen since the Sun Goddess shut herself up behind a stone door to protest her brother Susano-o's misbehaviour." After the deflationary policy, the Japanese economy has been through a time of low increase period which has lasted until today. To refine the oil, they started to develop the petrochemical industry. By the late 1960s, Japan had risen from the ashes of World War II to achieve an astoundingly rapid and complete economic recovery. Similarly, even though the term "economic miracle" is not very specific, I believe in Germany when you talk about "Wirtschaftswunder", people generally take it to refer to the postwar period. 1. Japanese post-war economic miracle The new Asia The influence of Japan in 1942 Japan has created the most advanced in the world steel industry,. Japanese post-war economic miracle This article has multiple issues. The second reason that accounts for Japan's rapid recovery from WWII was the outbreak of the Korean War. [5] The appreciation of the yen led to a significant economic recession in the 1980s. The postwar Japanese “miracle” has lost much of its luster since the 1990s, when the economy fell into a protracted post-bubble slump. For example, 83% of Japan's Development Bank's finances went toward strategic industries: shipbuilding, electric power, coal and steel production. Approximately only two-thirds of the shares of a given company were traded, cushioning keiretsu against market fluctuations and allowing keiretsu managers to plan for the long-term and maximize market shares instead of focusing on short-term profits. The extent of the policy was such that if MITI wished to "double steel production, the neo-zaibatsu already has the capital, the construction assets, the makers of production machinery, and most of the other necessary factors already available in-house". In 1953, MITIs revised the Foreign Exchange Allocation Policy to promote domestic industries and increase the incentive for exports by revising the export-link system. [10] The Korean War was fought in territory that had been, until 1945, Chōsen (朝鮮) that Empire of Japan had annexed. MITI's Foreign Capital Law granted the ministry power to negotiate the price and conditions of technology imports. Since the oil price rose tenfold, the cost of production also soared. Using a variant of this type of decomposition that takes into account improvements in the quality of capital and labor, estimates of scale economies and adjustments for structural change (shifting labor out of agriculture helps explain why total factor productivity grows), Denison and Chung (1976) generate a useful set of estimates for Japan’s Miracle Growth era. a political movement of reformation within the communist party of the soviet union in 1986. 2. The revisionist critics correctly emphasized the role played by Japan’s government in working toward that goal, but they neglected the other two pillars of Japanese success: large companies and a well-educated workforce. Early modern period. The Japanese then managed to maintain much more modest but steady growth rates until the early 1990s. During the war, Japan's maritime transport was cut off by the Allied powers, and it had been difficult to obtain raw materials. Restrictions imposed on Japanese defense spending enabled Their measures demonstrate that Japan's economic success cannot be ascribed to any single factor, such as capital formation, technical prog ress, or education, but results from a combination … Japan's postwar economic growth “miracle” is often cited as clear evidence of the virtues of the “East Asian model,” an ambitious growth blueprint that entails considerable state-intervention in the economy. Inflation made it easy for them to pay them back without difficulty - until the bubble burst in 1990, which left the banks with innumerable bad loans and brought many to bankruptcy or need of financial support from the state. Their are obvious reasons for which we should minimize this number at first. Eastern Phoenix: Japan Since 1945. Fifteen years later, in 1980, the nominal GDP had soared to a record $1.065 trillion. Japan’s postwar economy developed from the remnants of an industrial infrastructure that suffered widespread destruction during World War II. Japan has become the first power in the world in shipbuilding. At the time FILP controlled four times the savings of the world's largest commercial bank. The first decade of this high economic growth was a period of recovery from the economic dislocations brought about by Japan's defeat in World War II. In this way, MITI formalized cooperation between the Japanese government and private industry. The Japanese government contributed to the post-war Japanese economic miracle by stimulating private sector growth, first by instituting regulations and protectionism that effectively managed economic crises and later by concentrating on trade expansion. A small country scattered over four major islands with little arable land (less than 20 percent) and a mountainous terrain. According to Knox CollegeProfessor Mikiso Hane, the period leading up to the late 1960s saw "the great… Turning to the importance of individual explanatory variables, my results clearly demonstrate that convergence, albeit an important factor in post-war growth, is insufficient to account for the wide spread in growth rates across different economies. In addition, due to the financial flexibility afforded by the FILP, Ikeda's government rapidly expanded government investment in Japan's infrastructure: building highways, high-speed railways, subways, airports, port facilities, and dams. By the time Ikeda left office, the GNP was growing at a phenomenal rate of 13.9 percent. The Japanese press likened liberalization to "the second coming of the black ships," "the defenselessness of the Japanese islands in the face of attack from huge foreign capitalist powers," and "the readying of the Japanese economy for a bloodstained battle between national capital and foreign capital." The Plaza Accord was successful in reducing the U.S. trade deficit with Western European nations but largely failed to fulfill its primary objective of alleviating the trade deficit with Japan. The Japanese economy survived from the deep recession caused by a loss of the U.S. payments for military procurement and continued to make gains. Many factors contribute to economic growth, and although some reasons ar… Another factor was the friction between the United States and Japan, as Japan's rapid economic growth could potentially harm the economic interests of the United States. The Japanese economy was once one of the most successful in the world. In 1985, the United States signed the "Plaza Accord" with Japan, West Germany, France and Britain. The German economic miracle refers to Germany's rebirth as a global economic power after the devastation of World War II. It postulated that Asian nations will catch up with the West as a part of a regional hierarchy where the production of commodity goods would continuously move from the more advanced countries to the less advanced ones. The reasons for Japan to complete industrialization are also complicated, and the major characteristic of this time is the influence of governmental policies of the Hayato Ikeda administration, vast consumption, and vast export. Contrastingly, the consumption in recreational, entertainment activities and goods increased, including furniture, transportation, communications, and reading. His plans however met severe opposition from both industries who had thrived on over-loaning and the nationalist public who feared foreign enterprise takeovers. 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