Future government policies to spark economic growth could make it more difficult for businesses. The large deficits due to the stimulus prevented an economic depression. And worst of all, Japan has been gripped by deflation for the best part of two decades.
Innovation leads to economic growth. Case Discussion Questions 1. Businesses respond by cutting prices further to try to get consumers to spend.Japan suffered the same during the eighties. References Fingleton, E. Expectations that prices will fall can lead to reduced demand. In an analysis of a countries economic performance through history, a benchmark is set an available for compare to other countries. Sufficient regulation for lending practices — Banks had to increase their standards when pre-qualifying lenders based on the ability of lenders to repay the loan. Government efforts to stimulate economy not effective — Japanese government tried to inject financial stimulus into the economy. While these lending dynamics raised equity and real estate prices, the boom in asset prices and increased leverage fueled consumption, mal- and over-investment, and growth. Week 2, The internation Business Environment. International Business, Competing in the Global Marketplace 9th ed. Retrieved Sept 11, , from inginvestment. Increasingly, young people are pessimistic about the future. Such behavior can result in a negative cycle. Causes; 6. Opening up immigration will increase the population 4. Bloomberg News.
Along with the raise in unemployment rate and weak industrial production relative to other major industrial countries, the economic malaise in Japan was described as a lost decade.
Growth measured in nominal GDP was flat for nearly 2 decades due to the combination of slow economic growth and deflation.