ABSTRACT
This chapter provides a brief introduction to the postwar Japanese economy. The Supreme Commander for the Allied Powers (SCAP) assumed power at the time of Japan’s surrender on August 14, 1945. SCAP was headed by General Douglas MacArthur until 1951, and the Treaty of San Francisco ended the occupation in 1952. SCAP fostered the creation of a new democratic government and the end of Japan’s militaristic nationalism. Japanese industry provided supplies for the United States and other allied military forces during the Korean War. The Plaza Accord was an agreement between the United States, Japan, and the major European nations to depreciate the US dollar by about 50 percent. The oil supply shocks of the 1970s are seen in the Japanese case. The 1980s were a time of relative peace and quiet in the macro economy of Japan. The growth rate cooled in the 1970s and 1980s but was still over 4 percent per year.
