Japan's Economy 'The Sun Also Rises'

The Sun Also Sets, best-seller of 1990, had predicted the bubble economy burst.

 

With optimism growing over Japan's economic prospects, Bill Emmott, editor of respected British newsmagazine The Economist and author of the best-seller The Sun Also Sets, has said in interviews with the Asahi, Nikkei and other Japanese newspapers that the nation's economy has completely recovered and long-term growth can now be expected. The Economist, in its October 8 issue, carried a special feature on Japan entitled 'The Sun Also Rises,'written by Emmott, who recently visited the country. Emmott based his recovery prognosis on higher personal consumption and wage levels, and said growth could be led by domestic demand. His assessment is that the 15-year adjustment period following the collapse of the bubble economy has ended: the non-performing loan issue is resolved, companies have stopped wasting their capital, over-employment has been corrected, and politics are now driven by pragmatism. Improved productivity means 'the sun is rising again,'he said, predicting that Japan would probably bask in its warmth for the next 10 years. He foresaw a bright future for the Japanese economy.

  The Sun Also Sets, published in 1990, was the first study to foretell the collapse of Japan's bubble economy. After its publication, Japan entered a period of stagnation that many journalists and economists saw as terminal. Such sentiments persisted until quite recently.  Overseas, however, the pessimism was not universal. In The Re-Emerging Japanese Superstate in the 21st Century (written by the Hudson Institute and published in Japanese translation in March 2002), the authors noted in the preface that the pace of revival was irritatingly slow, but the road ahead for Japan was an uphill one. [Yet] there would be no sunset for Japan, they argued; the sun will rise again. In measured language, the work argued that there was no basis to the theory of Japan's decline.
   Overseas media and critics were first to truly pick up on both the collapse of the bubble economy and Japan's subsequent revival, and this pattern has not changed. Emmott's comments could well trigger a wave of optimism throughout Japan. Indeed, soaring urban land prices and an uptrend in stock prices are already fuelling mutterings about the return of the bubble economy.