Economic stagnation in Japan: exploring the causes and remedies of Japanization

In: KDI/EWC series on economic policy

Abstract

Japan's dramatic transformation from economic success to economic stagnation offers important policy lessons to advanced countries everywhere that are struggling with stagnation. The term 'Japanization' is often used by economists to describe long-term stagnation and deflation. Symptoms include high unemployment, weak economic activity, interest rates near zero, quantitative easing, and population aging. In the global context, what can governments do to mitigate the downward trends experienced by Japan? This judicious volume investigates in depth the causes of Japan's 'lost decades' versus the real recovery achieved by the United States, and the lessons that can be learned. This book helps to provide a basis for assessing a wide range of policy approaches from which policymakers and governments can choose to avoid economic decline. The expert contributions provide an overview of the pattern of `Japanization' in a global economic perspective, analyze similarities and differences between the Korean and Japanese economies, and examine policy measures taken by Japan during the lost decades. From this analysis, the book proposes future policy solutions for countries experiencing 'Japanization'. Economic stagnation and the relevant policy reactions have been of keen interest around the globe since the global financial crisis and this book will be an invaluable resource for scholars, policymakers, and economic commentators alike