The Japanese economy grew at an average rate of just 1% in real terms per year throughout the 1990’s. This was a marked decline of the growth rate from over 9% in the period of 1956 to the first oil crisis year of 1973, and slightly over 4% during 1975-1991 period.
The year 1991 was a symbolic year. In this very year, Japan?s so-called economic bubble began to collapse, while we witnessed the U. S. economy hitting the very bottom after long stagnation, followed by historically the longest expansion leading to new economy in late 1990’s. This was the year of the Gulf War and the implosion of the Soviet Union. India, also in this year, introduced new economic reform policies which successfully gave dynamism to her economy and began to attract good quality inward FDI (foreign direct investment).
All this means that the sudden stall or paralysis of the once miraculous Japanese economy happened in a rapidly changing global economic and political paradigm. This also means possibly this change in Japan must be seen in a broad global and historical perspective and framework.