

Japan's Lost Decades
126 snips Apr 5, 2024
Discover the dramatic rise and fall of Japan's economy, from its 1980s boom to the perplexing 'lost decades.' Explore how a confusing mix of economic policies led to stagnation, despite once being a global powerhouse. Learn about the bursting of Japan's asset bubble and the banking crisis that followed. Delve into innovative strategies like quantitative easing that emerged from the wreckage. The episode offers valuable lessons for other economies, reflecting on recovery, workforce challenges, and the potential future of Japan's economy.
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Japan's Rise and US Anxiety
- Japan's economic rise in the 1980s caused anxiety in the US, leading to incidents like smashing Japanese cars.
- Japanese companies bought US assets like Columbia Pictures and Rockefeller Center.
The Bubble and the Beginning of the Lost Decades
- Japan's lost decades began with a typical recession triggered by a stock and real estate bubble.
- The bubble inflated land prices, with the Imperial Palace land's value exceeding all of California's.
Zombie Loans and Banking Crisis
- Japanese banks gave failing companies lenient terms on loans, creating "zombie loans."
- The government delayed addressing the issue, leading to a banking crisis in 1997.