Business Cycle - The US and the Japanese Experience
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Case Code: ECON001 Case Length: 03 Pages Period: 1930 - 2003 Pub Date: 2004 Teaching Note: Available |
Price: Rs.200 Organization : - Industry : - Countries : USA, Japan Themes: - |
Abstract Case Intro 1
Caselet 01
USA faced its worst economic crisis in the 1930s. This crisis is often described as the Great Depression. The depression lasted for a decade, and affected the entire economy. The reason for the depression can be traced back to the 1920s, when there was great inequality in the distribution of wealth, and heavy speculation on the stock market in USA.
Though the GDP increased from $74.3 billion in 1923 to $89 billion in 1929, the disparities between the haves and have-nots widened, and this created instability in the economy. According to a study done by the Brookings Institute, in 1929, the top 0.1% of Americans had a combined income equal to the income of the bottom 42% of the population...
Caselet 02
The Japanese economy has been in recession since the early 1990s. The economy was burdened with bad debts and underwent a serious deflation. The monetary policy measures taken by the central bank to boost the economy were unsuccessful.
They only resulted in an increase in the level of debt, which is now equal to almost 130% of GDP. There was a decline in consumer and business spending because of lack of confidence in the economy. Prices fell and the value of assets came down...
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