Key Features of the Economic Development of East Asia

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It can be seen that the major part of the mid-40s to the 1950s was spent in picking up the ashes of Hiroshima and Nagasaki, and only later did Japan try to start off as a producer of small and medium-sized goods in electronics and household appliances. The commitment of the people and the Government was nothing short of legendary and this enabled an economic miracle in Japan. Right from the 1960s, Japan has experienced consistent growth. In fact, the average growth rate of GNP was estimated at a whopping 10 percent in the decade of the 1960s, which reduced to 5 percent in the 1970s and further to 4 percent in the 1980s. It was unfortunate that the growth rate was reduced due to the overheating of the Japanese economy. As often happens in the case of a lengthy period of economic prosperity, it was thought that the good times would never end and this precipitated an unprecedented rise in the prices of both real estate and shares in the stock markets. Historical records indicate that a similar situation was witnessed in the USA in the Roaring Twenties (1920s), a decade of unbridled euphoria and prosperity, and then it all came down in a shocking way on 24th October 1929, when the stock market tumbled. The resulting panic in the days that followed led to the Great Depression and it took the rest of the decade for America to find its feet again under President Roosevelt. The Japanese economy in the early 1990s was experiencing the same kind of economic situation when the real estate prices were at an all-time high in 1991 and this was followed by the crash of the Tokyo Stock Exchange in 1992. By the late 1980s, Japanese workers were being paid really well and this added purchasing power and affluence to a lot of families. But it would result in higher prices of goods and services which would limit the effects of prosperity. With the growth rates stagnated at 1.5 percent in the 1990s, it would be termed the Lost Decade by locals as well as the world at large. Although the Bank of Japan lowered interest rates, there was no appreciable change in investment, the major part of it has already occurred in the second half of the 1980s.