CIAO DATE: 6/03

Japanese Economic Stagnation: Still in Neutral

Edward Lincoln

April 2003

Brookings Institution

 

Abstract

One of the discouraging problems in Northeast Asia over the past decade has been the lengthy malaise in the Japanese economy and the inability of government, business, and the public to forge effective solutions. In the decade since 1992, the average annual real (inflation-adjusted) economic growth rate has been only one percent positive but very low and punctuated by four recessions in which gross domestic product (GDP) fell for at least two consecutive quarters. The financial sector is weighed down under an enormous amount of non-performing loans that has only grown larger over time. Meanwhile, Japan has become the first industrial country since the 1930s to experience deflation decline in the overall price level.

Full Text (PDF format, 7 pages, 977 KB)