The long stagnation of the Japanese economy during the 1990s and macroeconomic policies

It is useful to begin with some comments on the Japanese growth record in the postwar era. Aoki, Yoshikawa and Shimizu show it in Figure 9.1 of Chapter 9 in this volume. During the 1950s and 1960s, the average growth rate was 10 percent; it was an era of high growth. The average growth rate went down to 4 percent in the 1970s and 1980s. During the 1990s, the average is only 1 percent.