Preface: Today I want to summarize an academic article about Japanese economy, which called “Three theories”. The writer introduce readers three theories about why Japan was turned from prosperity to stagnation. Please help me correct my words. Thank you.
1.Robert Brenner held a view that “the capital accumulation and profitability of the system as a whole”. He argued that the capitalist production was a chaos with no plans and coordination. And the fixed-capital investments trend to become outdated. When 1950s and 1960s, a set of institutions enabled the state, the banks , and the manufacturing industry to coordinate with each other.Japan enjoyed the fixed-capital investments and boomed. When Japanese corporation invaded the whole world. Because of the competition, the profits fell dramatically, leading to the fall of profitability at the aggregate level.
2.Richard Katz was using the theory of development stages. Most of Japanese growth can be explained by “catch-up” effect. The government policies were simply accelerated the process. As the Japanese economy matured in the early 1970s, exports could not hold the growth rate anymore. Meanwhile the government intended to maintain the existing industries in order to avoid the unemployment. But the dynamics for further growth were dampened.
3.T.J. Pempel started from political explanation based on “regime shift” . A regime consists of socioeconomic alliance, political economic institutions, and a public policy profile. All the three factors changes in early 1970s. The shifting of economic structure led to the conservative party fell.