The high economic growth of the Japanese economy during the 1950s and 1960s ended in the early 1970s. Glancing at virtually any time-series of Japan, one is, in fact, struck by a sharp break around 1970. For most variables, the ‘structural’ changes in the early 1970s seem to have been caused by the sharp deceleration of the growth rate. Even seemingly unrelated variables such as the female labour participation rate show a break around 1970, which can be explained by the growth rate (see Yoshikawa and Ohtake (1989) for the variable just mentioned). It is therefore essential to understand why the high growth of the Japanese economy ended around 1970. Many economists and casual observers, both in Japan and abroad, attribute the ‘structural change’ to the first oil shock in 1973. The present chapter takes issue with this standard view and maintains that the structural change was basically caused by domestic factors and that it preceded the 1973 oil embargo.
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- High Economic Growth and Its End in Japan: An Explanation by a Model of Demand-led Growth
- Palgrave Macmillan UK