Japan - The Fading Economy

  • Published: 22 August 2019
  • Japan became the first of the modern Asian countries to experience massive sustained economic growth. Japan had a lot going for it after the end of the war, it was able to rebuild with the help of the allies and go through its own modern industrial revolution. In the 1960’s japan was growing at a rate of 10% a year which for a national economy was unheard of at the time, this economic growth continued and japan was able to ride the wave of globalisation as the worlds low cost manufacturer. Japan developed a huge car industry, it was at the forefront of consumer electronics and was working meticulously to make sure that this new found wealth was being invested wisely into infrastructure like high speed rail, airports and metro systems that would make their economy even more efficient.

    At its peak there was so much wealth in japan that the real estate market of Tokyo had some pretty crazy anomalies. In the late 80’s it was estimated that the imperial palace covering an area of 3.4 square kilometres in central Tokyo had a real estate land value greater than all of the real estate in California. Of course, the imperial palace was never for sale and this was based of the cost per square feet in the area but it still should give a good idea of just how much money was washing around in Japan.

    In this video we will look at how this all went so wrong and what it can tell us about countries that are today where japan was 40 years ago.

    References -

    Hutchison, M.M., Westermann, F. and Fuest, C. eds., 2006. Japan's great stagnation: financial and monetary policy lessons for advanced economies. Mit Press.

    Lockwood, W.W., 2015. Economic development of Japan (Vol. 2161). Princeton University Press.

    Music - teamrock.pro/user/watch?v=KBeTtawWClE

Comments • 2 156

    SHASHANK SAXENA  33 minutes back

    there is no sense in owning super computers, private jets, billion dollar companies, hyper cars, by every citizen....so stagnation is a reality...western people r too much obsessed with measurable things that they simply forgot about metaphysical components of material world...they r idiots(aggressive low iq but highly tactile bcoz of their geography influenced evolution) who somehow managed to grow superficially when great eastern civilizations were in dilemma(intelligent prefer not to bully idiot and r less aggressive, coordination is also a problem for highly intelligent beings since ultra high level thoughts r difficult to convey extensively over large population, and misunderstandings r common) about material growth & thinking about ways to decouple growth with content life.

    • jager64xxx xxxpanzer
      jager64xxx xxxpanzer  2 hours back

      the land of rising debt.
      Yeah right.

      For folks with working brain, here's a little math problem for you.

      The Greece, the country whose economy gone to absolute shit due to the notoriously gigantic national debt had about
      34,00000 dollars.

      And Japan has the debt
      of over *10,000,000,000,000 FUCKING DOLLARS*.
      That's close to *3 MILLION TO ONE*.

      Now which do you think is worse,

      3.4 million dollar debt


      10 trillion dollar debt?

      I'm pretty sure that anyone with brain can see that if measly 34mil dollar debt can break one's economy, a country with 10 TRILLION DOLLAR DEBT should be at least in the constant state of "THE PURGE" or the madmax.

      Now here's the question to anyone who's ever been to Japan, or anyone who's watched some youtubers vlogging in here.

      did you see any masked dude hacking into some poor children with a meat cleaver while you were staying at Japan?

      Yeah that's because there's no PURGE situation going on in Japan.

      I'm not even gonna go into details cuz it's clearly obvious that the debt in Japan is that of different nature.

      And to the brainless clown that post this video I got something to say to you:

      Pull your fucking head outta your mom's arse and use your fucking brain for once before trying to clickbait people with your shitty videos you fucking brainless cretin.
      Move out of your mom's basement and go get yourself a proper job cuz you clearly don't
      have any talent with youtube business🖕

      • Ryan Sullivan
        Ryan Sullivan  3 hours back

        The quiet "house of the rising sun" in the background...

        • Abhijeet Vishwakarma
          Abhijeet Vishwakarma  8 hours back

          This video is truly informative.

          • povasmr
            povasmr  11 hours back

            I dig the piano version of House of the Rising Sun haha clever

            • Anneliese Heasman
              Anneliese Heasman  12 hours back

              What's the piano piece playing in the background from the beginning?

            • mohammad zaker
              mohammad zaker  15 hours back

              I live in Iran, the central bank is under the direct control of the government and because it's want to pay the banks debt mismanagement and stolen money from corruption it has devalued the Rial to dollar 3 times its original value in 2017 and the ordinary people lost all their saving and to put on that we are now sanctioned by the U.S because we abide by the U.N resolution and The Joint Comprehensive Plan of Action, so we the people of Iran are under attack from our government and foreign countries and are broke, because every thing are now tripled we can't marry by house (in Iran you have to pay the full price of a house fist) and the company's are laying lots of employees and all those people are now working in uber so that's how life in Iran is now and we are the scound angry people of the world

              • Xahar Xeruji
                Xahar Xeruji  18 hours back

                Just a bit correction.... to be honest there are few economic analysis or interpretations that I don't agree but i just want to focus on one think only. Japan first reduces its interest rate is nothing to do with stimulate the country's economy through so-called monetary policy. Japan reduce its interest rate in 1986-87 mainly because it wants to comply with Plaza Accord. This short documentary fails to mention this most important factor. Due to lower interest rate (which happen around four years before the Lost Decades started] caused abundance of Credit Money. Japanese were encouraged to borrow money from local banks to buy as many as possible the property in market. Property price shoot up [as has been mentioned in this video when comparing the price surrounding the Royale Palace and the entire state of California]. Why Japan has to comply with Plaza Accord? Because US has military based in Japan to protect from any nuclear threat [based on the interview with Bank of Japan official]. And US badly need Japan to devalue its Yen to reduce US own trade deficit. Bubble burst on the property market could be one of the reasons for the Lost Decades but the main culprit is definitely because Japan fails to maintained its competitiveness in global market. A good example is the wiped out of the name Sanyo. Bubble burst should not have a long lasting effect, losing the competitiveness, yes.

                • ZephenomZ
                  ZephenomZ  22 hours back

                  All because someone jinxed it.

                  • Voievodul Titirez Socolescu Yon

                    who the f thinks like that besides old paranoid economic heads? stuff money under the bead! year right! deflation happens slowly. and ppl have needs and wants now. people will just buy more of the same stuff they usually consume or move a bit higher up the consumer brackets

                    • Dust storm C0Ming
                      Dust storm C0Ming  1 days back

                      Japanese are nice polite people they were the main source of tourism for the Gold Coast Australia untill the mid 90's. Now the Chinese tourist have replaced them and alot them are rude horrible people with no respect. I was spat on by a Chinese tourist they are horrid. They made thier fortunes too quickly and are stuck up pigs.

                      • Yadin
                        Yadin  1 days back

                        “Deflation will make an economy come to a grinding halt” ... um no, production will fall until prices rise back to break even

                        • Mtbdrum
                          Mtbdrum  2 days back

                          Anyone wanting a more in-depth look should watch The princes of the Yen here on Youtube. Very insightful.

                          • tanjoy0205
                            tanjoy0205  2 days back

                            Can do one on Singapore

                            • Charles Jannuzi
                              Charles Jannuzi  2 days back

                              Some of the reasoning is flawed here. People don't think like that about purchases like cars. And since their money earns no interest, it holds back consumption. Savers are penalized in almost every aspect of the country now. Near-zero or even negative interest rates combined with artificial Abenomics (cack) inflation.

                              • Stefche Macrae
                                Stefche Macrae  2 days back

                                Are you a fellow (ex) VCE economics student? Target inflation between 2-3%p/a sounds like something straight from the RBA charter

                                • Charles Jannuzi
                                  Charles Jannuzi  2 days back

                                  A timeline would help. Japan faltered after the war, and was going to turn socialist. That is why the US intervened with aid, like the Dodge Plan. It must be pointed out it was mostly aid in the form of loans, and so Japan became a high-debt country right from the start of the boom.

                                  • Anselle Joe Singco
                                    Anselle Joe Singco  2 days back

                                    i love your voice...

                                    • Apple Islander
                                      Apple Islander  2 days back

                                      there is only one true way for Japan to get out of this shithole
                                      that nigga needs an oil boom

                                      • Sumeet tanwar
                                        Sumeet tanwar  2 days back

                                        watch Prince of yen, really good documentary what central bank did to Japan.

                                        • Laurence Cserépy
                                          Laurence Cserépy  2 days back

                                          Japanese inflation is not 2-3% its between 0 and 1%

                                          • NaitomeIya
                                            NaitomeIya  2 days back

                                            Economy is just all about MAKIN’ MONEY CIRCULATE!
                                            Building a new infrastructure by contracting a private company seems to be a brainy excuse to make the money go round, but what if the money gets spent for the government officials’ private possessions overseas instead?

                                            • BUX BE
                                              BUX BE  2 days back

                                              What is this pointing to is a new currency. I'm not talking about crypto in a dead space until him out something quite different. As I live in Sydney and you are obviously Australian, give me a call.

                                              • Léa Strasser
                                                Léa Strasser  2 days back

                                                Declining Birth Rate, Declining Economy, this country is done.

                                                • Postino
                                                  Postino  1 days back

                                                  yeah Japan should just replace their population with Somalians like your garbage country did. It worked out so well for Germoney.

                                              • allgoo 19
                                                allgoo 19  2 days back

                                                I hear Nikon is brink of bankruptcy.

                                                • Hawk M
                                                  Hawk M  2 days back

                                                  Just me or did the elephant get missed? Economic growth = PPP - Population, Productivity and/or Participation. Japan has had no population growth (insert immigration) and so no economic growth.

                                                  • Ryaken
                                                    Ryaken  2 days back

                                                    Japanese do have one major competitive advantage: Their anime. Of course now even the Chinese are trying to challenge it with their own animated series.

                                                    • Ryaken
                                                      Ryaken  2 days back

                                                      Nah it makes sense. It's like maxing out all the buildings and population in Civilization.

                                                      • Pro Gram Mer Ng
                                                        Pro Gram Mer Ng  3 days back

                                                        Japan products are the Best. THE BEST

                                                        • Alex Mercer
                                                          Alex Mercer  3 days back

                                                          You just had to turn your video into a propaganda crap at the very end by equating China with Japan and saying that making technology is a sign of a bad economy.

                                                          • Jacques Mertens
                                                            Jacques Mertens  3 days back

                                                            You really don't understand anything about economics. If the interest rates go down the housing market goes up. Houses will sell for whatever people can afford to borrow.
                                                            You don't have any extra money at the end of the month because you're still spending most of it on your house. A lower interest rate on your mortgage, but on a much higher capital.
                                                            The end result is that you are just as poor as you were before the interest rate dropped and have approx. the same amount of money to spend on household or luxury items.
                                                            For that reason a lower interest rate will not cause inflation of consumer goods.

                                                            • Mr Sausage
                                                              Mr Sausage  3 days back

                                                              why people still complaining abt jpanese peole do a crime at war .
                                                              meanwhile america kill hundered thousand kids in japan

                                                              • Ultimate Gaming
                                                                Ultimate Gaming  3 days back

                                                                Message to Japanese people
                                                                START FRICKIN

                                                                • DEEPANJAN SAHA ROY
                                                                  DEEPANJAN SAHA ROY  3 days back

                                                                  What i think is japan should invest and diversify its investment outside Japan and let others work for them

                                                                  • glitch gamer
                                                                    glitch gamer  3 days back

                                                                    How japan seems soo well doing

                                                                    • Sanuku
                                                                      Sanuku  3 days back

                                                                      Never borrow money
                                                                      IT doesnt matter why would you
                                                                      Dont dont do IT
                                                                      Unless internet rate is 2/3% or less
                                                                      Or even than no

                                                                      • Sanuku
                                                                        Sanuku  3 days back

                                                                        They sre jot the only ones.

                                                                        • Jiawei Ke
                                                                          Jiawei Ke  3 days back

                                                                          "Economics" worth studying? Want to learn "Jiawei No Mix". Its idea is rather simple. You must be racist and reject everything that you consider a threat and hazardous to your own well being. This also means that even if you provide obscene opinions or views online you don't really actually have to be paranoid about using VPNs. When you are under the impression you have no choice... you still have a choice. You always have a choice. If you have a nuke or possess the technology to send me to the bottom of the ocean. Go ahead and do so. No-one cares and would feel sorry for your actions.

                                                                          • aa bb
                                                                            aa bb  3 days back

                                                                            Korea has become the 3rd superpower while Japan is now a pathetic has-been with zero competitiveness and no known export product. Japan's decrepit and moribund rail traffic system is a good example. No transfers, cape gauge, expensive fees. Even some developing countries like Thailand have better systems. I think that some third world countries will have a transfer system encompassing planes buses metro tuktuk jeepney etc.

                                                                            • Christian Libertarian
                                                                              Christian Libertarian  3 days back

                                                                              There was clearly some kind of change in Japan in the early 1990's, but I don't know what. In the early 1990's, I bought Sony everything--TV, amplifier, speakers, WalkMan, DVD players. They were the best. Then they stopped. Sony started to try defending their old systems, not allowing new tech. I haven't bought anything Sony this millenium.

                                                                              • 欧阳嘉骢
                                                                                欧阳嘉骢  3 days back

                                                                                Japan is still strong ok
                                                                                even I'm a Chinese I can't deny the fact that Japanese is making their country better and stronger

                                                                                • KillMeWithPotato
                                                                                  KillMeWithPotato  4 hours back

                                                                                  @Joshua N. And Japanese text uses Chinese Characters too?

                                                                                • KillMeWithPotato
                                                                                  KillMeWithPotato  4 hours back

                                                                                  @Satrio Rama That's the thing. It won't work if they actually fix their corporate culture which restricts Japanese people from considering having a family due to social restrictions from society and peers.

                                                                                  Subsidies won't work if you actually tackle the problem.

                                                                                • Joshua N.
                                                                                  Joshua N.  6 hours back

                                                                                  @KillMeWithPotato His username is Chinese, mate...

                                                                                • Satrio Rama
                                                                                  Satrio Rama  15 hours back

                                                                                  @KillMeWithPotato In the extreme case, japan gov could force young people to get married by giving subsidy and law that require workers to marry. Those statistics showing the trend IF there's no improvement and japanese gov still doing their best to resolve this issue.

                                                                                • 欧阳嘉骢
                                                                                  欧阳嘉骢  1 days back

                                                                                  KillMeWithPotato I'm not gonna have a debate with you about Japan. Japan is increasingly open for immigrants and it's bringing changes in Japanese society. let's see what's gonna happen

                                                                              • Antoine Harvey
                                                                                Antoine Harvey  3 days back

                                                                                Honeslly common economics are too simple... You should look into marxian economics

                                                                                • Naofumi Iwatani
                                                                                  Naofumi Iwatani  3 days back

                                                                                  why do westerners love taking credit for other people's efforts? barf.

                                                                                • Theodore Castro
                                                                                  Theodore Castro  4 days back

                                                                                  I visited Tokyo last year and fell in love! I hope to live there someday!

                                                                                  • David Orvik
                                                                                    David Orvik  4 days back

                                                                                    The House of the Rising Sun

                                                                                    • Louis Huang
                                                                                      Louis Huang  4 days back

                                                                                      Taiwan is part of China so I don't think there was any need of repeating the same country twice.

                                                                                      • Trickster
                                                                                        Trickster  44 minutes back

                                                                                        Lol dude. You know what he meant. He didn't mean any offence.

                                                                                    • Lauw
                                                                                      Lauw  4 days back

                                                                                      @Economics Explained This video is just wrong. A quick google can tell you that Japan's economy did not stagnate at 4.9 trillion for 30 years where there have been no growth at all. Their economy suffered through recessions and growth in the past 30 years, with 2012 being the year they recorded their highest GDP ever with over 6 trillion. However it has since declined again and fell into 4 trillion, and grown again into 4.9 trillion now.

                                                                                      • SiGHT SMaSH
                                                                                        SiGHT SMaSH  4 days back

                                                                                        4:26 @scottykilmer trigerred