Case Analysis: Japan's Economic Malaise
Review the Japan's Economic Malaise Case Study at the end of Chapter 3 of the Hill text. Answer the five Case Discussion questions in a Word document and submit your responses to the Week 2 Course Dropbox.
You will find at the end of chapter 3 starting on p.95 in our electronic e-Book in the classroom.
Japan’s Economic Malaise
In 1989 Japan was widely viewed as an economic super-power. After three decades of robust economic growth it had risen to become the world’s second-largest economy. Japanese companies seemed to be obliterating entire American industries, from automobiles and semiconductors to earthmoving equipment and consumer electronics. Japanese companies …show more content…
The 1985 Plaza accord that depreciated the US Dollar versus the Japanese Yen and the West German deutschemark. This had an effect of appreciating the Yen against the dollar which proved harmful the country’s export-driven economy as their products became more expensive. Growth measured in nominal GDP was flat for nearly 2 decades due to the combination of slow economic growth and deflation.
Stock Market collapsed – asset prices collapse due to the bursting of various bubbles
Property Prices Plunged – due to the oversupply of property and debt
Banks sharply curtailed the easy lending practices that financed the boom – maybe in an effort to make themselves more liquid banks did not want to expose themselves to risky loans
Consumers stopped spending – consumer confidence dropped due to the economy
Consumers expect prices to continue to fall, delaying purchases – in an effort to sell products. Company’s lowered their prices in an effort to make their products attractive to consumers.