ABSTRACT
This is the way the economist Noguchi Yukio summed up the situation of the Japanese at the beginning of the 1990s. One would expect that the Japanese people would have benefited from the high yen in the form of lower prices of imported goods and from budget surpluses going into more social capital. However, corporations did not pass on profits to consumers. As pointed out in the previous chapter, they channelled profits into ‘zaitech’ investment activities instead. In addition, the government preferred to reduce bond issues and did not direct domestic savings into improvement of domestic infrastructure but into acquisition of assets abroad. Consequently, when the bubble economy collapsed in 1991, Japanese people were left with a lot of luxury goods, but woefully inferior social security programmes compared to other economically developed countries.
