ABSTRACT
This chapter discusses some of the reasons for Japan's post-war success and for the sudden, rude interruption to growth that she experienced in the 1990s. It examines the nature and causes of Japan's trading imbalance with the West. Japan began the post-war period as a semi-industrialised country that had been badly devastated by war. In 1947 one-half of the working population was employed in agriculture and forestry and only 16% in manufacturing. Over the period 1953 to 1973, output growth was fastest in the manufacturing sector, averaging 12.5% per annum. In this process of expansion, an important role was played by exports, although they accounted for a relatively small share of the economy. However, although fast export growth was an important contributory cause of Japan's postwar success, some observers have questioned whether Japan's growth could be defined as export-led. Nevertheless, export growth was an important contributory factor in Japan's post-war expansion.
