Japan: The System That Soured: The Rise and Fall of the Japanese Economic Miracle (Google eBook)

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M.E. Sharpe, Jul 10, 1998 - Business & Economics
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Ten years ago, Japan was predicted to dominate the world's economy. Today, it seems too feeble even to rescue itself from its economic malaise. How could the world's most acclaimed economic miracle have stumbled so badly? Why were most experts in the U.S. and Japan caught off-guard? And why do Japan's leaders still deny the gravity of the situation?

As this book explains, the root of Japan's problem is that it's economy and politics are still mired in the patterns of the 1950s-1960s. Back then, Japan's practices were brilliantly suited to engineering an unparalleled industrial takeoff. But, once Japan became a mature economy in the 1970's, continuing in the same old mold became a recipe for disaster. The Japanese system enshrined cartels and protectionism. It created a dual economy of super-strong exporters but woefully inefficient domestic sectors. It slowly and insipidiously sapped productivity, drove Japan's most effecient companies to invest overseas, and created the financial imbalances that are wreaking havoc today.

Unfortunately, Japan's vested interests and political machines are so dependent on existing practices that resistance to reform is powerful. And yet, warns author Richard Katz, without sweeping political-economic renovation that goes far beyond mere deregulation, Japan is doomed to years of economic stagnancy, financial turmoil, and political gridlock.

The challenging thesis articulated in this book is receiving widespread media attention in the United States and Japan and is sure to provoke continuing debate and controversy.

  

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Contents

Mainframe Economics in a PC World
3
Japans Deformed Dual Economy
29
Hollowing Out Driving Away the Geese That Lay the Golden Eggs
47
From Growth Superstar to Economic Laggard
55
The Politics of Japanese Economic Policy
75
195573 The System Succeeds in the Era of CatchUp
107
197390 The System Sours
165
Economic Anorexia From Bubble to Bust
197
Reading the Econometric Tables
359
From Superstar to Laggard The Growth Model
362
Trade and Growth
372
Japans Peculiar Trade
376
The Overloan System in Banking Artificial Scarcity
382
Economic Anorexia in a Developmental Perspective
384
How Japans Cartels Destroy Productivity
386
The Dual Economy and Hollowing Out
396

If Poland Can Reform Why Not Japan?
239
Asia Versus Japan in the Race to Reform
250
Japans Peculiar Trade Too Few Imports Too Few Exports
258
Is Japan Opening Up?
272
Beyond Revisionism and Traditionalism A New Paradigm to Guide Policy
289
Interregnum Whither Japan?
318
Why Industrial Policy Only Works in the CatchUp Era
349
Controversy over ExportLed Industrialization
358
The Macroeconomics of the USJapan Trade Imbalance
397
Trade Capital Flows and the Gyrations of the Yen
401
InvestmentDriven Growth Versus ProductivityDriven Growth
405
Notes
407
Bibliography
435
Index
449
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Page 3 - But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.
Page 3 - But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.
Page 9 - An Asian economic bloc with Japan at its apex ... is clearly in the making. This all raises the possibility that the majority of American people who now feel that Japan is a greater threat to the US than the Soviet Union...

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