Japan's Lost Decades

Planet Money

NPR

Business, News

4.6 • 29.8K Ratings

🗓️ 5 April 2024

⏱️ 27 minutes

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Summary

Last month, Japan's central bank raised interest rates for the first time in 17 years. That is a really big deal, because it means that one of the spookiest stories in modern economics might finally have an ending.

Back in the 1980s, Japan performed something of an economic miracle. It transformed itself into the number two economy in the world. From Walkmans to Toyotas, the U.S. was awash in Japanese imports. And Japanese companies went on a spending spree. Sony bought up Columbia Pictures. Mitsubishi became the new majority owners of Rockefeller Center.

But in the early 1990s, it all came to a sudden halt. Japan went from being one of the fastest growing countries in the world to one of the slowest. And this economic stagnation went on and on and on. For decades.

On this episode, the unnerving story of Japan's Lost Decades: How did one of the most advanced economies in the world just fall down one day — and not be able to get up? Japan's predicament changed our understanding of what can go wrong in a modern economy. And gave us some new tools to try and deal with it.

This episode was hosted by Jeff Guo. It was produced by Emma Peaslee and engineered by Cena Loffredo. It was edited by Molly Messick. Alex Goldmark is Planet Money's executive producer.

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Transcript

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0:00.0	This message comes from NPR's sponsor, Organic Valley, the farmer-owned cooperative dedicated to providing ethically sourced food from small organic family farms.
0:10.0	Discover how you can support local organic farmers at oV. coop slash ethically sourced.
0:17.0	This is Planet Money from NPR.
0:22.0	There was a time back in the night. Pierre.
0:29.0	There was a time back in the 1980s when the future looked like it belonged to Japan. Japanese imports were everywhere.
0:32.0	Japanese steel, Japanese cars.
0:34.8	How can Corolla give you so much for so little?
0:37.2	It's just a Toyota tradition.
0:38.8	We leave!
0:39.8	We leave!
0:40.8	We're the week!
0:41.8	Japanese electronics.
0:43.0	Put on a walkman and see the world in a whole new light.
0:48.0	Japan had performed an economic miracle.
0:51.0	It transformed itself into the number two economy in the world, second only to the
0:56.2	U.S. And it's hard to imagine now, but back then people in the U.S. were genuinely anxious. They were like these big
1:04.6	Hollywood movies that had Japan taking over the global economy like this one from
1:09.2	1989 called Black Rain. We make the machines. We build the future now. Music and movies are all America
1:18.7	is good for. There's also a lot of Japan bashing. Like literally people would get together and smash Japanese cars.
1:26.2	We've got Tim Donovan here taking his frustrations out on this 78 Toyota.
1:31.5	Japan seemed unstoppable.
1:34.0	All that money that Japanese companies were making,
	...

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