The Ascension of the Japanese Economy to Pre-eminence

Abstract

In this chapter I shall present a broad-brush sketch of the Japanese economy, basic facts relating to it, its structure and changes therein. Also, I shall attempt to give a succinct overview of its operation. The approach, essentially, is that of mainstream economists. Although the treatment is in no way comprehensive, it does cover all the salient aspects of Japanese economic growth during the post-war period. From the ravages of the Second World War, the Japanese economy rose and rebuilt itself into the second largest economy in the world by the early 1970s. It is an achievement lauded by the world at large. A decade or so later, it became the largest creditor country in the world, and then, in quick succession, the largest donor and the largest foreign investor. By the mid-1980s, it was generally recognised as an economic, financial and technological superpower. This process of growth from an abjectly low economic level to international pre-eminence is analysed here. Japan’s new status has significant international implications: in the world after the cold war, economic strength has a great deal of swaying capability. This has assigned Japan a meaningful role not only in the Asia-Pacific region, but also in the wider international economic arena.