![]() ![]() ![]() When the property crash came, the nation’s banks were left insolvent, carrying overvalued loans on their books that were backed by properties that kept falling in value. What Happened To Japan’s Economy After The Property Crash? The economic environment that the Japanese stoked in the 1980s can be seen repeated in over-supplied property markets in emerging economies such as China and Brazil. How Did The 80s And 90s Financial Crises In Japan Occur?Ī financial crisis in the late 1980s and early 1990s can be directly attributed to the government’s inability to soak up the excessive liquidity that was pumped into the economy during the post-war era.Īlthough inflation and large amounts of government financing for development helped to erode the national debt as a percentage of GDP, the excess of capital made loans cheap and created a property price bubble. How Did The National Debt Erosion Impact Foreign Income?Īt the same time, a mercantilist trade policy allowed the government to increase the country’s foreign currency income, which did not erode in value as quickly as the Yen.Įroding the national debt away with inflation became a classic government strategy that was implemented around the world with varying success. ![]() They correctly estimated that a post-war currency devaluation and increased inflation would erode the national debt. We discuss top imports, exports, overall GDP, GDP-per-capita, and how the country ranks globally in trade.ĭespite an already crippling debt, the government pushed even more bonds into the market. ![]()
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