AHC: Japan becomes the economic powerhouse everyone was expecting

Until the 1990s economic crash everyone thought that Japan will become an economic powerhouse. How can Japan avoid the crash and continue its economic growth?
 
Keynesian economics in response to crash (primarily a real estate crash, right?)

That is, be counter-cyclical and not pro-cyclical. In particular, don't suddenly get a burr under your saddle to balance the budget during an economic downturn.
 

apollo11

Banned
They need a larger population. Also could take actions to boost productivity a bit, Japan lags behind the U.S. and France in productivity per hour for instance. A Keynesian response would help too but fundamentally Japan needs a way bigger population to have a larger GDP.

So in an ATL Japan decides as far back as the 50s/60s to allow mass immigration. By 2018 ATL they have a population on par with the U.S. and the largest economy on the planet.
 
Until the 1990s economic crash everyone thought that Japan will become an economic powerhouse.

The best part of that era was listening to pseudo-intellectual management gurus explain how western companies could all become super-prosperous by adopting Japanese management techniques.
 
. . . A Keynesian response would help too but fundamentally Japan needs a way bigger population to have a larger GDP. . .
And we in the U.S. might better appreciate immigration. :)

And during a downturn in which people are being laid off (made redundant) in the private sector, for God's sake don't also lay off people from the public sector and feed into this and make it worse. In fact, maybe even hire additional people for infrastructure, experimental, and other projects, when labor, supplies, etc, are a little cheaper anyway. And yes, obviously I'm a fan of the Keynesian approach.
 
Japan was an economic powerhouse. It's GDP peaked at 18% of global GDP in 1994. And it still has an impressive GDP all things considered.

To maintain its status, it probably would have need to be a leader in banking and software. Japanese banks were huge in the late 80s but too many bad loans to Japanese companies undermined their position. Within technology, they were much better in hardware and semiconductors. As software developed it took preeminence in the tech stack and the Japanese were pushed to the side next to American companies. Finally, various Japanese social policies such as lifetime employment and shareholder rights most likely delayed meaningful reforms and adjustments that would have allowed the economy to adapt to the new environment.

All that said, I would argue that Japan was "punching above its weight" in the 1980's and was highly unlikely to maintain its status even with my suggested changes.
 
They need a larger population. Also could take actions to boost productivity a bit, Japan lags behind the U.S. and France in productivity per hour for instance. ...

Upgrade the industrial plant. In the 1980s Subaru/Isuzu built a spanking new cutting edge production plant in Indiana. Meanwhile their home plant in Japan was still operating mostly with 1950s era plant structure and tools. Their operation in Taiwan was more productive. Had then been operating by British, German, or US management doctrine they would have closed the Japan plant, or maybe upgraded it to at least state of the art. Instead the offshore locations subsidized any loss from continuing the older home island operation.
 

kernals12

Banned
By GDP PPP, it was the largest economy from about 1985-1995. I guess maybe this thread is really asking to prevent the bubble and how much bigger could Japan get?
Absolutely false. America was the largest economy from 1890 until just a few years ago when it was overtaken by China.
 
Great fun!! :p Such as this book from 1989:


Thing is, if Japanese corporations really were "planning ahead for the next century"(as was sometimes said), they should have been foreseeing internet shopping in 1980. Otherwise, their plans for the next twenty years, let alone the next hundred, weren't worth shit.
 

Marc

Donor
A bit amazed at the cluelessnes about Japan economically.

Third largest economy by GDP in the world.
2.5 times the per capita income of the 2nd largest, China.
4th largest exporter Globally (Germany beats it significantly - then Germany could plausibly be 2nd, after China, in a few years).
Basically tied with China as the largest holder of US Treasuries - about a $1 trillion worth of bonds.
 
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