Could some economicsfag explain why Japan's economy has been stagnant since the early 90's and what caused it to boom...

Could some economicsfag explain why Japan's economy has been stagnant since the early 90's and what caused it to boom in the 80's?

Thanks lads

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nber.org/chapters/c0092.pdf
telegraph.co.uk/news/worldnews/10895239/Greece-sues-for-7-billion-euros-over-German-submarines-that-have-never-sailed.html
youtube.com/watch?v=w8fCmUbjDtg
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something something encouraging people to save money something

something something low birthrate something

In the 80s Japan was basically what China is today. You used to get your cheap shit made there. China back then was a 3rd-world country where people lived in bamboo huts.

Nowadays you make all your cheap shit in China.

bubbles and salary men and 20 hour works days.

Is a stagnant economy actually bad if it is able to support everything its required to? There is always a ceiling to everything.

spbp
/thread

Not in a global economy

nber.org/chapters/c0092.pdf
Tl dr : deflation that they cant defeat for 30 years now.

Was it really cheap shit? They were making VHS and Video Game systems and other luxury items.

>hardworking Japanese meme
Americans work more and we don't commit sudoku like they do

Because of the US, Japan was trading partner #1 for Japan, because of proximity to SSSR, not South Korea is #1 trading partner because of proximity to China and North Korea, and as you can see, South Korea is doing really good, while Japan is so-so economy, still very strong, but with a tendency of decline

also birth rate, they have older population than rest of the Asia, but unlike Europe, they refuse to import more cheap labor a.k.a. rapefugees

Post-WWII to 1980s pretty much all the really cheap shit on Earth came from Japan. It was literally like China today.

I think the era of cheap mass produced Japanese garbage was the 60's and 70's. By the 80's the US was getting a fetish for the Japanese.

>why Japan's economy has been stagnant since the early 90's
no resources and the 'boom' always has a 'bust'... it's just that their technological nous has protracted the 'bust' over decades, rather than having it collapse over a couple of years (like it did in burgerland)

Decades old Japan is basically what China is today however the similarity lies in both countries huge amount of debt which unlike many Western nations goes nowhere and only provides a drain on the economy.
You have to understand that in Western countries much of the debt is owned by other Westerners and the money is recycled into the economy through taxes and purchases. The same can not be said about East Asian debt as much of their payments are simply funnelled into Western economies.
Thus they quickly grew by taking on tons of debt and now that the debt payments forms a large portion of their GDP they can no longer expand industries causing the stagnation you see.

For example Taiwan, Singapore and South Korea also suffer this although the first two actually have a decent amount of domestic lenders. Vietnam is going to be the next 'like a rocket' east Asian economy which ultimately fails somewhere between 2030-2050. If you want to make a bit of cash then go ahead and invest in Vietnam then sell your debt to the Jews.

It is if your country has generous welfare policies which the government finances by running up debt, requiring a constantly growing economy just to keep its head above water.

Wink wink, nod nod.

Remember when VHS first came out and it was almost $1500 for the player, and each tape was 40-60?

Had those been made in America, that price would have been triple at the least. Even after VHS was competing with Betamax the players were still nearly 1000 dollars.

In short the selling price of something isnt an indication of the price of labor that went into producing the product.

Their businesses are incredibly stagnant due to the nature of Japanese cultural mores. Innovation is frowned upon. Most businesses, even large ones, use fax machines regularly. Instead of firing workers, they are shunted aside into side rooms and treated poorly until they leave of their own volition. Productivity is piss poor because workers are expected to (unofficially) clock up massive numbers of hours plus attend after-work social events such as drinking with the team.

Imply put,

Central Bank driven boom leads to a natural bust, the natural bust was been and has continually been attempted to be circumvented by more Central Bank stimulus. Essentially never allowing the natural recovery to occur while simultaneously never allowing the crash to occur -- Keynesian Limbo

>selling price of something isnt an indication of the price of labor that went into producing the product.

supply and demand, the price for some new technology will always be higher... one of the economy jews

simple. (this is a multipart answer)

1) Japan is a net import ecconomy, meaning they don't have any raw goods to turn into finished products, in fact they don't have enough materials to supply their population, so they have to import.

2) Japan takes raw goods and turns them into finished goods, then exports the finished goods to pay for raw goods, in essense they NEED trade to survive

3) In the 70s when detroit was colapsing under the weight of their union contacts, AND the oil crisis was going on (thank you ford and carter) the US auto industry was weak for the first time in history. At that time Japan was about the only automaker in the world making SMALL and FUEL EFFICIENT vehicals. Thanks to the fuel efficient vehicals in a time of fuel shortages they gained a foothold in the auto industry.

4) Japan's Yen had almost no value at the time compared to the US dollar, and inside japan you got a lot for that yen, so the result was those Japanese cars were VERY CHEAP and japan made a fortune selling them in the US market

5) Land is a premium in Japan, the ecconomic boom made everyone in japan rich which fueled inflation, the Yen got stronger against the dollar, didn't buy as much in Japan, but by this point in time the Japanese auto and electronics industry was fueling a huge economic boom (1980s)

6) Japanese inflation continued and soon their goods became too expensive to sell anymore over seas. This cut into profits, now this is where the seeds of the japanese stagnation were first planted.

7) Japanese real estate market skyrocketed at the same time (80's) unfortunately the realestate market hit a bubble like none other in the world, with a square mile of downtown tokyo being worth more then all the land in the rest of the world combined
-No one could afford the land, so the BANKS ended up owning almost all of it (you'd take out huge loans to buy that overpriced land, then couldn't pay it back.

(CONT)

...Proceed

cmon your thesis is entertaining

America forced the Plaza Accord Act on Japan.

/thread.

Bubbles are often caused by illogical human economic behaviors. In Japan's case, it was the assumption (by everyone from common salaried workers to the CEOs and Ministry of Finance policy-makers) that land prices had nowhere to go but up. People would buy at any price, expecting it to go up.

And a lot of these land purchases were enabled by low-interest loans offered by Japan's banking system which was flush with cash due to Japan's burgeoning economy in electronics and automobiles.

The bubble popped when the Bank of Japan hiked national interest rates, which immediately caused a lot of people and companies to default on their loans, which created a credit crunch.

Japan's economy and society deeply value surface-level stability over any sort of American-style "creative destruction", so banks didn't exactly force foreclosures or asset forfeiture, and companies also didn't fire a lot of employees even though they were operating in the red. This went on for years, and the continued operation of deeply unprofitable companies on giant lines of credit led to the term "zombie companies" or "zombie banks."

So the Japanese economy never crashed radically like it might have otherwise, instead simply suffering a slow burn over the course of a decade as profits fell, land values sank, and spending contracted.

Japan mainly holds internal debt.

Big difference.

(continued)

8) Of course the banks never thought "can anyone sell this land at these prices"? so they kept giving mortgages for this land until the banks all were completely tied to the land they bought and no longer were LIQUID because while they were worth billions of yen (in land) NO ONE could actually buy that land for market price. This meant huge amounts of "wealth" was tied up and unable to move
-As anyone who studied capitalist ecconomies will tell you when money stops moving the ecconomy shrinks.

now imagine this, you are a bank
Say 100 people gave you $10,000 each to save.
You took that $10,000 and gave company x $1,000,000 to buy a building
Company X went under leaving that 1,000,000 building
HOWEVER the realestate market was in a bubble when that building was perchased, now no one can buy that 1mil dollar building

SO do those 100 people still have their 10,000 in their bank account?

Technically no. The bank can't cover the money that people saved in it. HOWEVER that's only true when the bank takes the loss (sells the property for less then 1mil). So what the Japanese banks do is REFUSE to sell the property, LOCKING thier money in the land and artificially keeping the value of that land at 1million dollars (even though no one would or could pay 1 mil for it).

THATS what happened in the early 90s. The Japanese people figured it out and there was a run on the banks to pull their money out of the banks. The Japanese government stepped in to stop the run, locking their money in the banks. So the japanese people STOPPED saving money in banks (they still dont) because the japanese government refused to let the banks fail or reform the banking/realestate failure.

With no one putting money in banks there no longer are financial institutions around that can invest huge amounts of money. This caused something called "Japanese STAGFLATION"

(CONT)

this is an accurate assessment of the 90's Japan bubble.

Well, in Japan, the head takes resoinsibly rather than the lowest ranking employee.

Japanese CEOs or even the Japanese Founder Resign more often in front of a press conference compared to American CEOs or Founders.

neat read look forward to part 3

A mix of small retarded administrative decisions (especially from the Japanese central bank) coupled with a relative lack of evolution form the methods of production of the 50s to 80s.
The value of the yen was very low compared to the dollar for decades. After some background currency war, Japan lost many of its advantages due to their own mistakes.
The Japanese economy relies massively on particular types of mid and big corporations that have a peculiar internal organization that is bound to produce inefficiencies. It was secondary as long as Japan was the semi-cheap factory of the world like China today. Some westerners even used to copy Japanese business institutions. Used to.
In the 80s they were in a massive manufacturing and housing bubble, comparatively bigger than 2008 US.
The extremely low birthrate in recent decades sure isn't helping.
Government spending is off the charts and the actual deficit is close to 30% of the budget. A third of the budget is allocated to reimbursing debt. The state essentially borrows to pay up interests. The only solution would be a massive cut in social program spending and pension cuts, but that's the only thing that could make the effeminate population rise.
Since 1990 Japan has lost of of the cheap manufacturing base to China, which was devastating since Japan is largely an export based economy.

like every book or movie, the original was so much better than a sequel

Japanese Stagflation is the result of money leaving circulation and prices raises at the same time.

Typically when prices raise that means there is a lot of money in circulation (lots of people can easily afford something == price of those goods increasing)

In stagflation money is going anywhere, it's not in circulation its under their bed or sunk into realestate no one can sell. MEANWHILE prices continue to RISE while the people can't afford as much. The economy SHRINKS, people lose thier jobs while things just keep getting more expensive. STAGFLATION

Meanwhile the banks can't even afford to give interest on the money you have in the bank that the government won't let you take out, in fact the banks start to charge people for keep their money in those banks.
And 20 years past with almost no change, and you have Japan of today, stuck in the same mess that took form in the 90s

A sizeable amount of are not becoming salary-men.

...go on

Not unless there is war.
"We owe it to ourselves" doesn't represent reality since it depends if you belong to we or ourselves. The Japanese government defaulting on its debt payment would cause both an internal revolution and a complete restructuring of the structure of production. The government is stuck between endless deficits making them the bitches of special interests while taxing the population ever more to cover their own incompetence and corruption, or not honoring its contracts which would cause a massive capital flight and an end to foreign investments. When you have the choice between cyberpunk and socialism, it's not a very bright future.

meanwhile (and this is important) with not enough jobs for employees in the market, real wages and benefits shrink, the Japanese are a long lived people, with almost no jobs being created, all the young people over the past 20 years have had to fight with each other for a very small number of job openings, meanwhile the older people hold onto their high wage jobs because japan is the type of place that rewards loyalty. The same people who's money is stuck in the banks or under their mattress are the only people making any real money in japan.

This means there is no natural STIMULATION on the economy caused by young workers in need of buying things like homes, cars and diapers, because there isn't enough of them who are making enough to get into those markets to count.

Until the older generations retire or die, the Japanese government lets those banks and the real estate market collapse the japanese economy will be locked in this malaise.

they live on a tiny island with no natural resources and aging population draining resources.

Japan used to be a Secondary economy, mostly focused on manufacturing, during and after the Second World War the wages and quality of life in Japan decreased considerably creating cheap labour, by the 80s this secondary economy was reaching its peak, enhanced by speculation as Japan moved to a service economy the county continued to receive enournous amount of foreign investment while quickly re investing the profits back into the economy, the population was expending as quickly as they earned money because it seemed like the economy was only going to get better, then speculation took its toll and Japan became a service economy ( which was due to happen it's not a product of the economic crisis and it's not necessarily bad) in fact Japanese people earn more and have a higher quality of life now than they ever had, simply their economy stopped expanding at the rate it was expanding before because a service economy offers services to the population for the service economy to expand the customer base needs to expand which usually means population growth.


Tldr
Japan reached the peak as a secondary economy around the 80s and transitioned into a service economy and was crippled by speculation, further on services economies rely on population grow to expand.

1. They have already reached their peak of development, so they lack ideas

2. Demographics

3. Zaibatsu model of economy that kills creativity and individual initiative

okay I got it...explain Greece collapse, lets kick that around a bit

greece was allowed into the eu even though it was shacky at best

when it the eu they took out a ton of loans even buying submarines yes you heard that correctly they bought submarines
telegraph.co.uk/news/worldnews/10895239/Greece-sues-for-7-billion-euros-over-German-submarines-that-have-never-sailed.html

Basically they dont have any money and they keep taking out loans to pay for shit they cant afford. It also hurts them being in the EU as Germany steals all their jobs and quotas.

Also see plaza accord

>explain Greece collapse

>have high inflation, low credibility in the eyes of the financial market and thus expensive debt
>get into Euro which is based on the credibilities of other economies, including Germany, Holland, Finland, France which lowers the cost of debt
>this credibility is automatically absorbed by Greece but that has distorted the real economy
>Euro gives cheap credit, low inflation
>banking crisis reveals all those falsehoods including the big inflation in comparison with Germany or Netherlands, which destroys your competetiveness
>You suddenly can't change the currency rate to help improve your competetiveness, you lose credibility in the eyes of the market, you have no monetary policy
>This is called an asymmetrical shock

>okay I got it...explain Greece collapse, lets kick that around a bit


this one is also a story of stagflation though instead of banks it's caused by unfunded public retirement packages.


Greece is socialism left to run unchecked. It's a huge nanny state where most people are employed by the government at some level, get paid huge wages to do very little, while the "private" economy was nearly taxed out of existence. It paid for this insane nanny state with debt and taxes

Eventually Greece hit a point where the INTEREST on their debt payment was larger then the country's GDP. They had to default on their loans and their credit rating tanked, no one would lend them money until they fixed their broken public welfare system.

Then Merkel came along, dumped billions on them and let them continue along in their socialist malaise for a few more years. Now no one has the $$ to spare to bail them out again and of course socialist being socialist no one will stand for their benefits being cut.

So you have a country which is about to become a failed state. It will happen eventually, because you simply can't print money to cover your debts and expect that cash to be worth the paper it's printed on. Eventually it will be too expensive to print that cash and the people of Greece will have to answer a question, "will I work for the nanny state for free?"

Chances are the answer is no. We're just not there yet.

Gradual socialism led to the stagnation of the free market which made them have a massive debt (over 200% GDP).
Basically what is going to happen to the USA in the next decades.

>Basically what is going to happen to the USA in the next decades
kek

Japs have 200% GDP debt yet markets trust them

That will change before 2020 ends.
Just like the petrodollar won't be around forever.

So isn't the best option to let the banks fail, have some recession, but then get the economy going again?

The worst part is that their retarded population knows this, but still riots every time the government proposes right wing policies. They were even on track to recover from that shit, but then they voted for Tsipras, the absolute madman.

They started outsourcing their industries offshore in the mid-80's. Insane real-estate prices caused a huge bubble that made most of their wealth vanish overnight.
By that time, they lost the recipe for success,
>> Anime and Feminism fucked the soul out of Japan after that.

The best option ALWAYS is for the government to GTFO of the economy, but the cattle never learns...

Japan dominated all aspects of technology in the 80's. It wasn't just Walkman's, it was innovations like the CD, things like the original Nintendo, more reliable and fuel efficient cars, etc. None of these things existed before that time. Japan literally invented the modern age of technology. But there's few places to go from there. It's difficult to keep innovating once you've already done just about everything you can do with certain things.

>what caused it to boom in the 80's
Social dumping.

>been stagnant since the early 90's
Depressed domestic demand.

>China is today
>literally like China today

Not really brehs. In some senses, you're correct: pretending ridiculous property bubbles are permanent economic growth. And they're causing a certain amount of anxiety in the West as their politicians push a "we're taking over the world and nobody can stop us bahahaaaa" meme.

But there are major differences and China has the worst of it.

China's people are mostly very poor still. Even if the Commies (who lie about literally everything) generously define terms like "out of poverty" and "middle class" to make themselves look like economic geniuses for having the insight to decrease the pressure of their boot, slightly, on the neck of Chinese people. Japan, on the other hand, had built up a lot of genuinely world class industries and a strong social safety net by the time they started getting ideas above their station regarding how much domestic debt they could absorb.

Plus, Japan's relatively free society with strong property rights meant that middle class people truly had a stake in their country. The so-called middle class Chinese all have one eye on the exit because they know that all it takes is the avarice of a local thug in the Party to end their prosperity without them having any real chance at recourse.

And finally, China's debt bubble makes Japan's look tame. Yeah, the land under the imperial palace was once """valued at more than the whole of Canada""" but at least the Japanese built shit that they could use. Every single Chinese city of any size (which is quite a lot of cities) is ringed by enormous numbers of empty, crumbling tower blocks that nobody wants.

Plus the Chinese are a lot dumber than the Japanese when it comes to understanding the need to protect their environment. The Japanese actually have a very long tradition of leaders protecting forests, for example, whereas China has always been a smash-and-grab kind of place, prone to big fortunes and catastrophic busts/famines.

I think you guys are overthinking this. Japan purposesly has to trash their economy to keep the value of the yen down. They overspend, overborrow and print money to keep inflation high and the cost of living down. Germany does the same thing except since Germany controls the EU, it can trash other countries and keep the value of the euro down while maintaining high living standards in Germany itself.

>So isn't the best option to let the banks fail, have some recession, but then get the economy going again?
yes, this is the best solution. they need to let the real estate market collapse and the banks fail right along side it. This is the only way to get money flowing again properly in the economy. Right now the land market and the zombie banks are the biggest millstone around japan's neck.

80... electronics

90... China because cheapo electronics

00... China continues to be cheapo electronics

10... China remained dominate until Trump space nukes were launched

I assume it was because Gundam Nintendo and Transformers showed up, this doesn't mean they're going to stimulate the economy by taking them away right ? Don't take away my Gundam....

youtube.com/watch?v=w8fCmUbjDtg

They fell for the massive amounts of debt meme

>This is the only way to get money flowing again properly in the economy.
Japan has a very high export market, their economy is doing fine, they dont have a money flow problem. They dont have a manufacturing economy at all anymore, they are a business economy. They purposely trash their economy to keep the yen from representing their true wealth.

low birthrate plus people and businesses are over saving on money. some corporations are just sitting on mountains of cash and aren't using it to invest in anything. then you add in deflation which disincentives spending even further

Gundam was a failure when it first aired.

Not sure. Do they have a (((central bank)))? Oh they do? Case closed then.

It's from a Christian perspective, but I think it's legit: youtu.be/ro0KT8SA6Lc

>tfw I'll never grow up during the late 80's and 90's in Japan

okay ill check it out

Why don't they just let the asset bubble pop instead of digging a deeper hole?