Myo Min Thein, 2016, International University of Japan
Introduction
In the 1970s, the Japanese economy could overcome the oil crisis and successfully achieved high economy growth. So, what features are included in the behind of the Japanese economy development? In the case, I really emphasized the role of actors which are not only the Japanese government but also private sectors how much influenced and how to try the best for their economy growth in that period. During before the bubble state and after World War II, it generally consists of three postwar periods in Japan. There are “economy under the occupation (1945-1950), high economic growth (1951-1972), and oil crisis and adjustment period (1973-1985)” (Nakamura, 2004). So, what are contributed to the extraordinary performance of the Japanese economy during before and after the oil crisis?
During the 1950s to 60s, due to the high economic growth of Japan, the Japanese economy strengthened supply-side economy and the government of Japan designed the mid-term and long-term strategy to guide vital investment activities in the private sectors, and it also called “post-war Japanese high growth miracle” (Katz, 1998). Especially, the government of Japan tried to handle the large demand for the Japanese products by recognized groups among the companies. Nevertheless, the high growth era was terminated in the early 1970s because of the Nixon shock and oil crisis. In 1971, the consequences of the Nixon shock, the US faced to hardly maintain their US Dollar base gold standard and also the international monetary system has shifted to the full-floating system. Therefore, the Japanese currency rate also increasingly appreciated from 36 yen/$ to 240 yen/$ during 1972 to 1985 shown in figure 4. Therefore, what I found a result that the export product of the Japan have been lost and it obviously faced price competition in the international market. Consequently, Japanese government terminated the long-term development plans and introduced efficient income policy in order to improve the hyperinflation.