Japan's Economic Malaise

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Japan’s Economic Malaise
Case Study 1
1. In the 1980’s Japan was viewed as one of the world’s most dynamic economies. Today it is viewed as one of the most stagnant. Why has the Japanese economy stagnated?
The Japanese economy has stagnated due to the Stock market crash. This turned the economy into a down turn as property prices fell and banks had large amounts of debt.

2. What lessons does the history of Japan over the past twenty years hold for other nations? What can countries do to avoid the kind of deflationary spiral that has gripped Japan?
This has taught other countries to avoid risky lending practices which lead to bad debt as well as to prevent overvaluation of its assets. Conversely this has also allowed other nations to take note of how a government should respond to a major economic decline in a timely matter.

3. What do you think would be required to get the Japanese economy moving again?
To get Japan’s economy moving again it needs to consider tax breaks and grants to damaged businesses to assist their reopening and increase the entrepreneurial presence.

4. What are the implications of Japan’s economic stagnation for the benefits, costs, and risks of doing business in this nation?
a. Benefits:
i. Japan is still the third largest free market economy
b. Costs:
i. Japans adequate infrastructure and supporting businesses
c. Risks:
i. Government mismanagement of economy mixed with high public debt.

5. As an international business, which economy would you rather invest in, that of Japan or that of India? Explain your answer.
I would personally invest with Japan rather than India. Japan has a higher income rate, higher level of human development, and the economic freedom. Whereas India does not really exhibit any of these though it does have a high economic growth…...

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