Japanese Economic Model

Japanese Economic Model
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Abstract
The growth of a country is measured in terms of economic growth. Different countries have different economies. This is often influenced by various factors like government policies, investment, availability of resources and technology. Understanding countries economic model assists in explaining its performance over the years. Japan has an interesting economic model which rose steadily at one point and later on became stagnant. The Japanese economy is industrialized and characterized by a free market. It is ranked as the fourth largest economy globally. This economy is efficient and competitive in international trade. The industrial economy of japanned was achieved through a combination of high savings, intensive promotion, skilled workforce both in industrial leadership and the technical field, good education system , attractive investment rates , foreign trade and stimulation of industrial growth and development. The economy of Japan was characterized by two phases; one being intensive growth and the other stagnant growth. In the years between 1960s and 1980s, Japan saw high rates of growth in its economy. This research addresses the economic growth of Japan and the causes of its boom and stagnation. This is achieved by gathering information about Japan and its economy from secondary sources and analyzing it. The internet, books and journals form the major sources used. After analysis of information from the above sources it was comprehended that Japan irregular economic model had two distinct phases. The first face between 1960 and 1980 saw major growth whereas the second face which started in the late 1980s was characterized by stagnation in the growth of the economy. The reasons for both phases are illustrated in depth the research findings.
Introduction
The economy of Japan comes fourth as the largest economy after EU, US and China. This implies that a decline in the Japanese economy will have significant negative impact to the global economy. Japan`s economy has had two distinct phases in growth from the 1955 up to now. The economy of Japan experienced substantial growth between 1975 and the 1980s (Denison 1976). However, it faced stagnation in growth during the 1990s. Later on in 2008 the economy of Japan faced recession due to the decline of the global economy. The economic model of Japan has undergone growth at one point and stagnation at another. Being among the top world economies Japan employs almost the same tools like US, EU and China. For instance the recession hit both Japan and the USA. In Japan the economic growth was restricted to 1% each year for a decade. According to Mosk (2001) both countries reduced interest rates in attempt to tackle the recession. Japan reduced from 6% to 1.75% while US cut from 5.25% to 2%
In addition both nations channeled billions of money into the economy in order to stabilize it. This move led to increased bud...