Japan: Deficit, Demography, and Deflation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Japan: Deficit, Demography, and Deflation Case Solution

Question: 01

Japan is considered as one of the growing countries among the developed countries. Japan has maintained its growth till 1971. It is expected that after the year 1971, Japan’s growth was affected badly due to the economic crisis. As Japan is an industrial country therefore, its economic growth is entirely dependent upon the imports of the steel, modern technology and machines and oils from US and oil exporter countries. In 15th August 1971,when the currency rate of Dollar dropped whereas, the exchange rate for Yen increased then that decreased the import cost of japan however, the US imposed 10% surcharge on import for Japan, which increased the cost of imports as well as this increased the cost of production. In 1973, the oil shock affected the world economy by increasing the oil price and it further increased the inflation rate in 1974, therefore Japan’s imports rose by 40% and the account of Balance of Trade deteriorated however, Japan’s balance its trade efficiently. Nonetheless,in the following years the Iranian revolution increased the oil prices around the world and this slowed the world economy by increasing the cost of production of the developed industrial countries such as US, UK, China and Japan etc. These oil crises decreased the performance of the Japanese economy by increasing inflation, prices, unemployment and by decreasing productivity and growth...................

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Japan: Deficit, Demography, and Deflation Harvard Case Solution & Analysis