Postwar Economic Changes in Japan

Melissa Chan 2nd Period Jan 30, 2012

Allies, mainly US, occupied Japan after war greater westernization and industrialization in economy occupation of Japan by the Allied Powers: August 1945 - April 1952; supreme commander was General MacArthur wartime expenses and mass production during the war threatened inflation and unemployment in Japan; American government played crucial role in Japans economic recovery emergence of Japan, Inc. (government-business partnership in Japan) made way for economic success after war Japans Iron Triangle (business dealings and decisions involving the interests of businessmen, politicians and bureaucrats) was largely successful; they worked together to improve the economy trade surplus (by exporting > importing), increased productivity, protectionist tariffs, government subsidies excess employment, production capacity, and regulation increase in trade and business dealings with US contributed to Japan becoming the 2nd largest economic power in the 80s technology used in industry and manufacturing during war efforts between 1937 and 1945 was converted to improving the economy after the war (i.e. machine gun factories were converted to make sewing machines; optical weapons factories now produced cameras and binoculars) Japanese companies in the private sector borrowed large sums from banks and expanded quickly Auto industry flourished; Honda was formed as a direct result of the postwar boom Devastation of Japans economy during the war led the Japanese to push for reforms in technology and management economy updated and upgraded High rate of investment in technology Improved economy increased savings rates capital funneled towards businesses even greater economic boom; 1/3 of the bank loans came from private savings Ministry of Finance and Ministry of International Trade and Industry (founded in 1949) worked to directly improve investment, regulate Japans industrial policies, and fund research and development