ABSTRACT
Japan's high growth came to an end in the early 1970s. Annual growth fell to an average of about 4 percent in the 1970s and 1980s, and further down to near zero in the 1990s. The government called this "stable growth". On the domestic side, transition to lower growth was natural and inevitable because the Japanese economy had caught up with the US and European economies and matured. On the external side, there were two major economic shocks in the 1970s that were common to all countries: the oil shocks and the beginning of general floating of major currencies. Many of the advanced countries depended heavily on imported oil with the average import ratio of 67 percent of domestic demand. Among them, Japan's foreign oil dependency was particularly high at 99.7 percent. After the first oil shock and "crazy prices" erupted, Tanaka's "Rebuilding Plan" had to be abandoned. Monetary policy was also gradually tightened.
