The lost decade ( 失 わ れ た 10 年 usinawareta ju: nen ) is a period of “stagnation” in the Japanese economy after the collapse of the Japanese financial bubble . The term originally included the period from 1991 to 2000 [1] , but recently the period from 2001 to 2010 is also sometimes included, so the entire period of the 1990s and 2000s is called lost decades or lost years ( Japanese 失 わ れ た20 年 Usinavareta Niju: Nen ) .
Content
Overview
In the early 1990s, the country's fast-growing economic growth slowed sharply. The end of the 1980s was marked by a massive wave of speculation by Japanese companies, banks and securities. The combination of the exceptionally high cost of land and exceptionally low interest rates led to a short-term situation when the loan was very cheap and easily accessible. This led to massive borrowing, the proceeds of which were invested mainly in domestic and foreign stocks and securities.
Recognizing the volatility of the financial bubble, the Ministry of Finance sharply raised interest rates at the end of 1989. The bubble burst, which led to a massive collapse in the stock market and triggered a debt crisis, which, in turn, led to a crisis in the banking sector.
In the end, a wave of consolidation began, with the result that only four national banks remained in Japan. The situation is critical for the long-term economic outlook, as Japanese firms were burdened with huge debts, which affected their ability to invest. It also meant that it became very difficult to get a loan, and even at present the official interest rate is 0.1% [2] . Many borrowers turned to moneylenders for a loan.
This led to the phenomenon known as the “lost decade,” when Japan experienced a complete halt in economic growth in the 1990s. Unemployment was growing at a significant pace (Japan has a low unemployment rate, which, however, is constantly increasing - during the 1970s and 1980s, its level ranged from 2–2.8%. In the 1990s, the figure slightly exceeded 3%; 2011, it was 4.9%).
Despite the economic recovery in the 2000s, conspicuous consumption of the 1980s, such as spending on whiskey and cars, has not yet returned fully. [3] This was due to the traditional Japanese emphasis on thrift and economy, as well as the fierce competition that Japanese firms dominating in the 1980s (such as Sony and Toyota ) experienced from companies in South Korea and Taiwan . Most Japanese companies began replacing permanent labor with temporary workers who did not have employment guarantees; these employees currently make up more than a third of Japan's workforce. [4] Orientalist Vsevolod Ovchinnikov in his interview (2004) mentions the ongoing “complex process of erosion of the life-time hiring system” - the practice of life-time hiring adopted in Japan, which contradicted the modern economic system [5] .
See also
- Japanese economic miracle
Links
Notes
- ↑ http://fhayashi.fc2web.com/Prescott1/Postscript_2003/hayashi-prescott.pdf
- ↑ Ohno, Kenichi Economic Development of Japan . National Graduate Institute for Policy Studies . Date of treatment April 3, 2011. Archived on September 6, 2012.
- ↑ New York Times
- ↑ Tabuchi, Hiroko . When Consumers Cut Back: An Object Lesson From Japan , The New York Times (February 22, 2009). Date of treatment May 11, 2010.
- ↑ Components of the success of the East Asian miracle // Psychological newspaper: WE and WORLD