8/12/2019 Japan's Growth

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Growth in the JapansEconomy The Mathematician Matthias Production

1

Factor Evidence Impact Evaluation

US Aid and

Assistance

Aid

- $0.5 billion parallel payment- Security arrangement to Japan

Assistance

- SCAP reforms Land reforms Education reforms

- Favourable terms of trade

Aid

- Help the Japan to focus solely oneconomic redevelopment without the

fear of being attacked by the

Communist countries- Kick-started the economic recovery

Assistance

- Sustain high demand- Expand export industries- Essential for relative social tranquillity

and enormous economic development

after 1952

- Aid and assistance are key totheir economic recovery

- But these factors are not longlasting

SCAP ended by 1952 The aid provided

Japanese only a short-

term resolution

Global

EconomicGrowth

Korean War

- Convinced the USA to supportJapan (ally in the Asia)

- Provided them with additionalsecurity protection as well as

economic aid ($3 million)

Cheap Oil (oil booms)

- Oil is the main of energy since it ischeaper as compared to petroleum

- Middle East supplied 43% ofEuropean oil imports and by 1950

the figure was 85%- Consumption level (W.E) increased

from 13.5% in 1950 to 32.3% in

1960

- Consumption level (Japan)increased from 6.5% to 39.6%

Korean War

- Stabilized in Japans economy- Provided a favourable climate for

growth

Cheap Oil (oil boom)

- Reduce COP and thus fuelled theexpansion of advanced industries

- Korean War ended by 1953 sono longer a need to protect somuch protection and aid to

Japan

- Moreover, the favourableconditions not exclusive to

Japan. So may not be key to the

economic growth.

8/12/2019 Japan's Growth

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Growth in the JapansEconomy The Mathematician Matthias Production

2

Factor Evidence Impact Evaluation

Role of the

Government

Protection and Promotion

- IBM could only reach the Japanesemarket by licensing their patents

to Japanese firms and forming joint

ventures

Iron Triangle

- Relationship based on mutualbenefits and shared beliefs

- Tight-knit and almost symbioticrelationship with the business

leaders

Protection and Promotion

- Reduced the COP- Allowing rapid expansion- Increased productive capacity- Increased market share in the globalmarket

Iron Triangle

- Made it easier to accept short-termsacrifices

- Fostered long-term growth

Provided the key supports to the local

firms

IF STAND IS GOVT,

Without the leadership of thegovernment, the US will have entered

and dominated the Japanese markets

IF STAND IS FIRM