ABSTRACT
Japan's growth patterns prior to the 1990s have made the relative stagnation that has occurred since Japan's asset bubble burst in 1990s that much more perplexing to policymakers and scholars alike. This chapter explores the causes of the asset bubble that emerged in the late 1980s and the prolonged recession that lasted throughout the 1990s. During the bubble economy, many excesses emerged. As land prices rose dramatically, people who owned land became rich. Those who did not have land, however, had a lesser chance of acquiring land as the bubble increased. The chapter then reviews the major developments in Japan's political economy since the 1990s, paying particular attention to the legacies of the way Japan developed. It considers attempts to reform Japan's economic system and analyzes the extent to which these reforms have positively impacted Japanese growth. Japan's political landscape also experienced a large amount of change and uncertainty during Japan's lost decade.
