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Japan

The Japanese economic decline of the 1990’s can be attributed to several things: poor growth performance, serious fiscal problems, weak labor market conditions, weakening of the trade and external accounts of the country, and excessively loose stance of macroeconomic policies.

Poor growth performance:
The Japanese GDP growth in early 1990’s was almost zero implying no new money in the economy and an inevitable recession.

Serious fiscal problems:
Large and growing public debt to GDP ratio, in 1992 it was 63% and rose to 89% by 1996. Debt ratio as a percent of GDP being this high isn’t helpful to the economy because it implies that p...

Posted by: Chad Boger

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