A structural analysis of Japanese economic development

Tsujimura Kazusuke and Tsujimura Masako

No 695, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Japan successfully escaped from poverty after the world war and attained prosperity in a matter of two decades. There were two keys for the success. One was the priority production system – the idea to develop the industries at the bottom of the triangulated input-output table first, and to climb the triangle step by step. The second key for the success was the country’s unique financial system; they deliberately grew both long-term financial institutions for large enterprises and local credit associations for small businesses. When Japanese exporting manufacturers fought the appreciation of yen at the end of the 20th century, their answer was the mass introduction of industrial robots. The exporters won the fight but the country did not. What went wrong; what lesson do we learn from it?

Keywords: Priority production system; Specialty financial institutions; Savinginvestment balance; Robotization; Japan; Economic development; Economic policy; Forms of production; Exports (search for similar items in EconPapers)
JEL-codes: C82 E16 O11 (search for similar items in EconPapers)
Date: 2018-02
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 695. 2018-02

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