Explain what changes and problems were experienced by Japan in the years after 1990.

There were paradoxical changes in the Japanese economy and politics after 1990 which are as follows:

  • Japanese started to consume less as compared to Americans, Germans and British. This was due to the higher prices, wage increases was behind inflation and sky rocketing property prices.
  • In 1980s the government spent on infrastructure which resulted in recession in 1992-93 and public spending suffered.
  • As the economic growth slowed down, the productivity of workers decreased and Japanese industries became less competitive internationally. To compensate and remain competitive, Industrialists increased production outside Japan.
  • With the decreasing trade surplus, declining exports and low productivity, lay off increased and unemployment was at 5.4 % in 2001.
  • A study suggested that this happened due to bureaucracy and banks because they were insulated from any interference of the government.
  • There were involvement of government ministers in corruption scandals. This kept the political front volatile and many resignations and changes in government took place.


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