Japanese Phoenix: The Long Road to Economic Revival: The Long Road to Economic Revival

by Richard Katz

Book Overview

Japan will recover and its economic achievements will once again earn the world's admiration, with sustained annual growth of three percent, perhaps more, well within reach. This is the confident forecast that begins Japanese Phoenix: The Long Road to Economic Revival by the author of Japan: The System That Soured, which several years ago accurately predicted Japan's current travails at a time when others were prematurely pronouncing full recovery...

• Format: Paperback
• Language: English
• ISBN: 0765610744
• ISBN13: 9780765610744
• Release Date: October 2003
• Publisher: Routledge
• Length: 368 Pages
• Weight: 1.10 lbs.
• Dimensions: 0.9" x 6.6" x 8.5"

Customer Reviews

An excellent explanation of the Japanese economic mess

Summary:The author provides excellent insights why the Japanese economy faltered. The economic miracle of the eighties did not grow much after 1989. He suggests economic reforms that would restore sustainable economic growth. But, he indicates such reforms are unlikely until Japan reforms its political system first. This means splitting the powerful LDP into two parties. This will not happen shortly. But, the building pressure for political reform as a result of the ongoing faltering economy is immense. Thus, Mr. Katz is confident it will happen. Abstract: Japan has gone from experiencing the "Japanese miracle" in the eighties to being in the economic doghouse since 1989. During the eighties, Japan economy grew at 4% per year with little inflation and unemployment. During the nineties, Japan experienced no economic growth, suffered deflation due to weak consumer demand; and. its share of World GDP and World exports shrunk. Japan sustainable growth rate has decreased from 4% in the eighties to only 1% in 2000, on its way to only 0.5% by 2010. Japan?s GDP grew by only 0.3% per annum since 1997. Why did this economic decline occurr? There are really two Japanese economies. One consists of the super efficient exporting industries, including automobiles and consumer electronics. The other consists of the much larger domestic sector which employs 80% of labor force. The domestic sector is protected from competition by an anticompetitive regulatory environment that allows price collusion and restricts all imports. This sector includes food processing, retailing, wholesaling , finance, farming, and other services. Within these domestic industries, Japan?s productivity is between 50% to 66% lower than in the U.S. During the eighties the productive exporting sector was carrying the inefficient domestic sector. But, in the nineties, the exporting sector progressively outsourced manufacturing overseas to lower its costs and remain competitive. As a result, the lagging domestic sector employing a rising percentage of the labor force caused a decline in Japanese productivity. Japan suffers many structural problems. Its companies are overleveraged, and have over invested in nonproductive investments. This has caused Japan chronic nonperforming loans (NPLs) problem. These NPLs represent a staggering 20% of GDP. The banking system generates these NPLs faster than it can charge them off. This crisis has been going on since 1989. Both the government and the banking industry have refused to make the tough decisions to resolve these NPLs. The allocation of credit is fraught with conflict of interests. Risk management is lackluster. The banking industry is the weakest among industrialized nations. Why are current monetary and fiscal stimuli not working? The Japanese central bank has maintained short term interest rates close to 0% for most of the past decade. The government has run large budget deficits (around 6% of GDP) for seve

Important Information on Japan

The author seems very knowlegeabl on Japan, how it got to be an economic superpower and the recent decade of stagnation. Gives you a quick overview of both. It seems sad that such creative people are mired in a horrible slump out of which they can not come out unless they change the way the think. A must book for anyone who wants to know why Japan is in such a sad state.