MITI was guided by economic nationalism, which can be defined as pursuing policies that promote national economic interest.
The Japanese fiscal year starts on April 1 st through to March 31 st of the following year.
However in Japan’s situation, banks did not increase the loan rates and companies were not enticed by the low cost of borrowing for investment. The projected injection of an extra US$1 trillion (£700 billion) to resuscitate the recession-hit US economy by the Federal Reserve would increase money supply, hence interest rates might be expected to fall even lower (Stewart, 2009).
The Bank of Japan, established in 1882, is the sole bank that issues the yen; it also plays an important role in determining and enforcing the government’s economic and financial policies. In Japan, the industrial policy was most pronounced in the manufacturing industry.
In the long run, Japan’s export increased and eventually Japan’s economy grew to become the world’s second largest. It all begun from the Meiji restoration, where Western influences first came in and expanded the industrial sector.
Before the WW II, it was known as zaibatsu which had been dissolved later due to nationalism issue.
By definition, industrial policy refers to all government policies that affect the allocation of resources, with the main economic aim of promoting economic growth.
The persuasion is exerted and the advice is given by public officials, who often have the power to provide or to withhold loans, grants, subsidies, licenses, tax concessions, government contracts, import permits, foreign exchange, and approval of cartel arrangements. When companies are privatized, the bureaucrats and government will play a lesser role in how the corporation will run. <<
Overview of the Economy of Japan. The practice is most prevalent in industries which have very strong government and business relations, and exists almost throughout the Japanese economy (Library of Congress, 1994).
Influence, prestige, advice, and persuasion are used to encourage both corporations and individuals to work in directions judged desirable. The firms that are most adversely affected are banks and investment companies, as the number of default loans increased. A central feature of the policy of self-sufficiency has been strong protection for local rice production and an artificially high producer price for rice. Inflation cannot be eliminated completely as it would affect other macroeconomic goals such as unemployment levels. Japan - Japan - The rise of the militarists: The notion that expansion through military conquest would solve Japan’s economic problems gained currency during the Great Depression of the 1930s. At the same time US industries become more reliant on their government for protection and hence are less competitive.Similar to Japan’s industrial policy, the currently defunct Advanced Technology Program in the US which begun in 1990 and the Technology Innovation Program in 2008, seeks to encourage research and development (R&D) of promising, high-risk technologies (Advanced Technology Program, 2005). This common aim motivates the Japanese to work together for the greater good of the country.The “Iron Triangle” is a stable coalition of politicians, bureaucrats and businessmen. The banks had given loose loans to firms to encourage investment and expand Japan’s industry. H�U��N�0��'�;|�zA�R During this period, Japan became an economic superpower, the second largest economy for a long period of time. Mike Moffatt, Ph.D., is an economist and professor.
A strong bureaucracy, like MITI, and a strong state are the pre-conditions for an active industrial policy. Financial credit to the “winning industries” increased as the MOF used the Bank of Japan (BoJ) to relax supervision over banks.
He teaches at the Richard Ivey School of Business and serves as a research fellow at the Lawrence National Centre for Policy and Management. No plagiarism, guaranteed!We're here to answer any questions you have about our servicesCopyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. /Length 11 0 R
MITI selected “winning industries” such as iron and steel manufacturing, to focus on developing and producing high-quality goods in vast quantities at competitive prices to compete in the international market. Corruption perceptions index (CPI) had improved from 5.8 in 1998 to 7.3 in 2008. However to new firms entering the industry, it might be much harder as the government will assist firms who have better relationships with them.
When Japan’s asset bubble burst in 1990, it led to a widespread devastation of the financial system. However, this dampens economic progress by increasing unnecessary expenditure.Administrative guidance (gyosei shido) is a principal instrument of enforcement used extensively throughout the Japanese government to support a wide range of policies.
As foreign imports of lumber and steel are increasingly cheaper due to increased efficiency and productivity, the US government has helped to protect its domestic industries with trade barriers such as high import tariffs. /Type /Page
The current practices of bureaucrats are advantageous to the corporations that had developed a strong bond with the government, giving them easier access for more funds in their projects for example.
A period of high inflation, high Monetary policy is directed by the nation's central bank, known as the Federal Reserve Board, which has considerable independence from the president and the Congress.
By adjusting spending and tax rates (known as fiscal policy) or managing the money supply and controlling the use of credit (known as In the 1970s, major price increases, particularly for energy, created a strong fear of Ideas about the best tools for stabilizing the economy changed substantially between the 1960s and the 1990s.