The Bubble Economy Of Japan

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While Japan is prepare to go
through a period of trade balance adjustment, it will also suffer a period of
recession, so the government strongly encourage business activities to
strengthen the economy in order to prevent backwash effect. It was this event
which boost up the GNP and raise the exchange rate. With this exchange rate
advantage it stimulate business activity on housing and stock investment which
created a bubble economy. During this period almost the entire country was
involve in land speculation or other speculate activities. In this essay it
will prove that land speculative activities had create many negative impacts to
the Japanese society and economy. Firstly, it will describe the cause of land
speculation. Secondly it will discuss on the society and political effects in
Japan and lastly it will focus on the economy effects, more over it will include
the aftermath when the bubble collapse.

The root of this bubble economy is due the wave of land ...

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4 million yen. Therefore there are lots of
potential investors. And during the period of speculative activities, borrowers
increase the value of their loans as the value of their collateral increases.
Since asset is highly liquidate, the number of potential speculators are high
and borrowers in Japan were able to get a larger size loan on real estate
therefore speculative activities sink into the level of common home owner and
large enterprise. Beside the method of calculating mortgage size, another reason
why the size of loan was so large is probably that both the bank and the
investor were behind the land speculation activity (banking scandal). Investors
were paying some key money ...

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