Lost Decade
The Lost Decade is commonly used to describe the decade of the 1990s in Japan, a period of economic stagnation which became one of the longest-running economic crises in recorded history. Later decades are also included in some definitions, with the period from 1991-2011 (or even 1991-2021) sometimes also referred to as Japan's Lost Decades.
The Lost Decade
Definition
The Lost Decade typically refers to Japan's 1990s, a period of economic stagnation and one of the longest-lasting economic crises on record. Later decades are sometimes included in some definitions, referring to the period from 1991 to 2011 (or even 1991 to 2021) as Japan's Lost Decade.
Origin
The Lost Decade originated from the bursting of Japan's asset bubble in the late 1980s. During that time, Japan's real estate and stock markets experienced rapid price increases, but after the bubble burst in 1989, market prices plummeted, leading to prolonged economic stagnation. In the early 1990s, the Japanese government and banking system failed to effectively address the crisis, resulting in over a decade of economic stagnation.
Categories and Characteristics
The Lost Decade can be divided into the following stages:
- Early Stage (1991-1995): The immediate aftermath of the bubble burst, with real estate and stock market crashes and the banking system facing a large number of bad loans.
- Mid Stage (1996-2000): The government implemented a series of economic stimulus policies, but with limited effect, economic growth remained slow.
- Late Stage (2001-2011): Changes in the global economic environment saw Japan's economy gradually recover, but growth rates remained below expectations.
Specific Cases
Case One: Real Estate Market Collapse
In the late 1980s, Japan's real estate market prices soared, but after the bubble burst in 1991, real estate prices plummeted, leading to the bankruptcy of many investors and companies. Many banks were burdened with a large number of bad loans, further exacerbating the economic crisis.
Case Two: Banking System Crisis
Due to the presence of a large number of bad loans, Japan's banking system faced a severe credit crisis in the early 1990s. Although the government took some bailout measures, due to poor policy implementation, the recovery of the banking system was slow, affecting the overall economic recovery.
Common Questions
Question One: Why were the Japanese government's economic stimulus policies limited in effect?
The main reasons were poor policy implementation, severe banking system problems, and changes in the global economic environment. Although the government took various measures, they failed to effectively address the root problems.
Question Two: What was the impact of the Lost Decade on Japanese society?
The Lost Decade led to prolonged economic stagnation in Japan, rising unemployment, declining social confidence, employment difficulties for the younger generation, and an overall negative social atmosphere.
