Japan's Economic Dilemma : The Institutional Origins of Prosperity and Stagnation

After decades of seemingly unsurpassable growth and prosperity, Japan's economy declined in the 1990s. The reversal stunned observers: How could the economy have reversed itself so abruptly? Bai Gao's illuminating analysis of Japan's economic story demonstrates how the same economic institutions could produce both remarkable successes and a prolonged slump. In Japan's Economic Dilemma, Gao describes tensions within the Japanese economic system that created a bubble in the 1980s, yet became unsustainable and led to a stagnant domestic economy in the 1990s. Those who have been following the lively debate over "What became of the Japanese Miracle?" will appreciate Gao's historical perspective and multilayered analysis. Bai Gao is an associate professor in the department of sociology at Duke University in Durham, North Carolina. He was a visiting scholar at Tokyo University and taught at Hitotsubashi University and Yokohama National University. He is the author of Economic Ideology and Japanese Industrial Policy (Cambridge, 1997), which received the 1998 Hiromi Arisawa Memorial Award in Best Books in Japanese Studies from the Association of American University Presses. The Japanese Economy, After Decades Of Seemingly Unsurpassable Competitiveness, Experienced A Major Crisis In The 1990s. The Depth Of The Crisis Has Been As Remarkable As Japan's Renowned Meteoric Success. Economies Rise And Fall, To Be Sure; But The Magnitude Of The Japanese Economy's Swing Within Such A Short Time, And In The Absence Of Major Wars, Is Unprecedented. Observers Of Japan Are Faced With A Challenging Question: How Can One Explain Japan's Seemingly Abrupt Reversal From Stunning Prosperity To Dismal Stagnation? Bai Gao Not Only Explains The Reversion But Also Goes Beyond Other Analyses To Demonstrate How The Same Economic Institutions Could Produce Both Stunning International Economic Success And The Subsequent, Intractable Slump Of The 1990s.--jacket. 1. Introduction -- 2. Three Theoretical Issues -- 3. The Rise Of The Principles Of Coordination And Stability -- 4. Coordination, Excessive Competition, And High-speed Economic Growth -- 5. Stability, Total Employment, And The Welfare Society -- 6. The Roads To The Bubble -- 7. The Struggle Of The Welfare Society -- 8. Fighting The Stagnation. Bai Gao. Includes Bibliographical References (p. 275-293) And Index. The Japanese economy, after decades of seemingly unsurpassable competitiveness, experienced a major crisis in the 1990s. Observers of Japan are faced with a challenging question: How can one explain Japan's reversal from stunning prosperity to dismal stagnation? Bai Gao, in this illuminating, comprehensive analysis of Japan's economic story goes beyond other analyses to demonstrate how the same economic institutions could produce both stunning economic success and the slump of the 1990s. By comparing the factors that sustained miracle growth in Japan in the 1960s and 1970s with the factors that led to the bubble economy of the late 1980s, Gao sheds new light on internal tensions in the Japanese economic system and how, finally, they 'burst the bubble' in the 1990s. Those who have been following the lively debate over 'What Became of the Japanese Miracle?' will be rewarded by Gao's richly detailed, historically informed, and multilayered contribution. After demonstrating seemingly unsurpassable competitiveness for several decades, the Japanese economy experienced a major reversion from prosperity to stagnation in the 1990s.