Banking Crises and “Japanization”: Origins and Implications

Masahiro Kawai () and Peter Morgan

No 430, ADBI Working Papers from Asian Development Bank Institute

Abstract: Japan’s “two lost decades” perhaps represent an extreme example of a weak recovery from a financial crisis, and are now referred to as “Japanization.” More recently, widespread stagnation in advanced economies in the wake of the global financial crisis led to fears that Japanization might spread to other countries. This study examines the dimensions of Japanization—including low trend growth, debt deleveraging, deflation and massive increases in government debt—and analyzes their possible causes—including inadequate macroeconomic policy responses, delayed banking sector restructuring, inadequate corporate investment, loss of industrial competitiveness, a slowdown in total factor productivity (TFP) growth due to excessive regulation and economic rigidities, and an aging society.

Keywords: economic growth; total factor productivity; inflation; demographics; credit growth; banking crises (search for similar items in EconPapers)
JEL-codes: E20 E31 E51 F31 G01 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2013-07-30
New Economics Papers: this item is included in nep-ban, nep-eff, nep-mac and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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