Asset Price Bubble In Japan In The 1980s

7881 words - 32 pages

IMES DISCUSSION PAPER SERIES
INSTITUTE FOR MONETARY AND ECONOMIC STUDIES
BANK OF JAPAN
C.P.O BOX 203 TOKYO 100-8630 JAPAN
You can download this and other papers at the IMES Web site:
http://www.imes.boj.or.jp
Do not reprint or reproduce without permission.
Asset Price Bubble in Japan in the 1980s: Lessons for Financial and Macroeconomic Stability
Shigenori Shiratsuka
Discussion Paper No. 2003-E-15

NOTE: IMES Discussion Paper Series is circulated in order to stimulate discussion and comments. Views expressed in Discussion Paper Series are those of authors and do not necessarily reflect those of the Bank of Japan or the Institute for Monetary and Economic Studies.

______________________________________________________________________ This paper is prepared for the IMF/BIS Conference on Real Estate Indicators and Financial Stability, held at IMF Headquarters in Washington, D.C. during October 27-28, 2003. This paper is based on my past research with many co-authors, including Kunio Okina, Makoto Saito, Tokiko Shimizu, and Masaaki Shirakawa. I would like to thank the staff of the Institute for Monetary and Economic Studies of the Bank of Japan for their helpful comments. The views expressed here are mine and do not necessarily reflect the official views of either the Bank of Japan or the Institute for Monetary and Economic Studies.
IMES Discussion Paper Series 2003-E-15
December 2003
Asset Price Bubble in Japan in the 1980s: Lessons for Financial and Macroeconomic Stability
Shigenori Shiratsuka*
Abstract This paper reviews the implications of asset price fluctuations on financial and
macroeconomic stability, based on Japan's experience of the asset price bubble.
Japan's experience of asset price bubble is characterized by euphoria, that is,
excessively optimistic expectations with respect to future economic fundamentals,
which lasted for several years and then burst. Under such circumstances,
policymakers are unlikely to take an appropriate policy response without
evaluating whether asset price hikes are euphoric or not, and forecast a correct path
for the potential growth rate. In so doing, it is deemed important to assess the
sustainability of financial and macroeconomic stability.
Keywords: Asset price bubble; Financial stability; Macroeconomic stability,
Sustainability.
JEL Classification Codes: E31, E44, E58, E63, G18
* Deputy Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of
Japan (E-mail:shigenori.shiratsuka@boj.or.jp)

1
I. Introduction In this paper I discuss implications of asset price fluctuations for financial and economic
stability, based on Japan's experience in the late 1980s.
A look back over Japan's experience since the late 1980s shows that the
emergence and bursting of the bubble played an important role in economic fluctuations
in this period. This experience clearly indicates that both financial and
macroeconomic instability is closely related to large fluctuations in asset prices, and
raises...

Read more

Find Another Essay On Asset Price Bubble in Japan in the 1980s

The Bubble Economy of Japan Essay

4460 words - 18 pages the value of their collateral increases.Since asset is highly liquidate, the number of potential speculators are highand borrowers in Japan were able to get a larger size loan on real estatetherefore speculative activities sink into the level of common home owner andlarge enterprise. Beside the method of calculating mortgage size, another reasonwhy the size of loan was so large is probably that both the bank and theinvestor were behind the land

Japanese Economy: The Burst of the Asset Bubble

1411 words - 6 pages Since the 1990s Japan has been in a deflationary spiral that has greatly impacted the country as a whole. This deflation that crippled the booming economy of the 1970s and 1980s is the result of many contributing factors, the greatest of which was the burst of the asset bubble. This happened in the early 1990s due to the uncontrolled credit supply and quickly growing asset prices. Recovery from the ensuing economic crash some economists claim

The Banking Industry in Turkey After the 1980s

1141 words - 5 pages As a conventional result of the economic liberalization in the economy and the banking industry in Turkey after 1980s, the competition in the banking industry increased significantly due to the reasons such as many new domestic and foreign players in the banking industry, release of the fund transfers specifically from international markets, empowering the banks to make transactions in foreign currencies, advances in the technology, and

The Tragedy in Japan

1681 words - 7 pages . No more words spoken, Hikaru propped the boy on the motorcycle and got on himself. In desperate times.. Hikaru thought nervously as he put the key in the ignition and hoped for the best. Exhilarating, that’s the only way to describe it. Wind blowing through my hair, I know its not the best time to have fun but when is it? It was now that Hikaru’s hopes fell, heart to his feet. “The Japan Railway service has now been terminated due to the

Social Satire of the Materialistic 1980s in American Psycho

986 words - 4 pages American Psycho (2000) offers a devastating social satire of the 1980s materialistic and hedonistic high society. Ironically, the film's monsters-in-hiding become increasingly evident even as the cinematography attempts to obscure most of the victims of Patrick Bateman (Christian Bale) with the dark hues of the nighttime. Additionally, the point-of-view (P.O.V.) editing in relation to Patrick Bateman illustrates his frustrations to the

The Imperial Period in Japan

622 words - 3 pages During the Imperial period, Japan both flourished and conflicted in religion, government, and art. Eventually, Japan adopted Buddhism as its national religion, and this played a significant role in the culture of the country. One example that was influenced by Buddhism is the massive Todai-ji Temple located in Nara. Situated here is the Daibutsuden, or the Great Buddha Hall, where a giant, bronze statue of the Buddha resides. The events of time

The Tokugawa Era in Japan

1350 words - 6 pages The Tokugawa Era in Japan, also known as the Edo Period, took place after the Era of Warring States, which in Japanese is called the Sengoku Jidai. Events that occurred during this era were essential to the start of the Tokugawa Shogunate¹. The Sengoku Jidai started in the 1500s with the Ashikaga Shogunate, when General Ashikaga Takauji crushed a samurai rebellion. The current emperor at the time, Go-Daigo, "—a man of 30 determined to put an end

The Atomic Bombs in Japan

1708 words - 7 pages States still remain controversial today and the United States’ abuse of power and morality can be questioned. ‘Were the dropping of atomic bombs in the cities of Hiroshima and Nagasaki a justified way to end World War Two?’. The answer is no, the bombings were not justified as Japan was already militarily and economically devastated, the explosion slaughtered thousands of guiltless civilians and President Truman seemed to have other political

Discuss the Historical and Social context of America in 1980s in relation to "Moonstruck"?

540 words - 2 pages The film, "Moonstruck" (1987), was set in the 1980s in America and was notably appropriated from "A Midsummer's Night Dream (Shakespeare)". In order to appreciate the aesthetic value of this appropriation, research must be conducted into the historical and societal context of this film.Being set in America in 1987, society at that time was developing. To give a brief idea of America at that time, it had a population of 226,54600, had a life

Assess the role of trade unions in the political changes of the 1970s and 1980s

1690 words - 7 pages Francis Meli in A History of the ANC believes that the African National Congress can be split into several time frames each facing different situations and going about dealing with them in different ways. The relevant period of the 1970s to the 1980s which we are to deal with in this essay can be best analysed in chapter 7 of his book The re-emergence of the ANC (1969-1985). I am not simply trying to deal with the ANC here, merely pointing out

Why has trade union density declined in so many countries since the early 1980s?

2465 words - 10 pages Germany”. (Fulton, 2013) Another explanation why Unions are not seen as relevant in Germany is that it has a centralised wage setting system, and accordingly low union backed wage increases, the German trade union worker may very well ask “What is it in it for me?” The change in Union density is similarly replicated in Asia, where there is largely a very different model to employment relations. Despite a high in the 1970’s Japan trade union

Similar Essays

Asset Price Bubble In Japan In The 1980s

7881 words - 32 pages IMES DISCUSSION PAPER SERIES INSTITUTE FOR MONETARY AND ECONOMIC STUDIES BANK OF JAPAN C.P.O BOX 203 TOKYO 100-8630 JAPAN You can download this and other papers at the IMES Web site: http://www.imes.boj.or.jp Do not reprint or reproduce without permission. Asset Price Bubble in Japan in the 1980s: Lessons for Financial and Macroeconomic Stability Shigenori Shiratsuka Discussion Paper No. 2003-E-15 NOTE: IMES Discussion Paper Series is

Indonesia In The 1980s Essay

1344 words - 6 pages Indonesia’s industrialisation policies play an important role in supporting the achievement of high and sustained economic growth. The move towards export promotion from import substitution in the mid-1980s succeeded in restructuring the economy from agriculture to semi-industrious. As a result, the role of industry within the economy has become increasingly important, and whilst it has been successful within its own sphere of socio-economic

Benjamin Franklin In The 1980s Essay

1609 words - 6 pages American government works was based upon ideas of Mr. Franklin. His inventions were the foundation for many new products made in the upcoming decades. The 1980s was a time of new discoveries and a revival in the government and society. A disease known as AIDS came to light, hard drugs such as cocaine were more commonly used, and popular culture at the time showcased America’s obsession with wealth. Ronald Reagan served two terms as president and

Heavy Metal In The 1980s Essay

1242 words - 5 pages Heavy metal in the 1980’s is hard to describe. Its static style did not change much from the 1970’s, but the lyrics, image, and theatrics took a step forward. Heavy metal had a huge impact in the 1980’s and there were many successful bands. Van Halen took heavy metal to new heights. After more than two decades of playing sold-out concert halls, selling millions of albums and enduring various lineup changes and solo projects, Van Halen is

Other Popular Essays

Brodman reaction Essay
kolera Essay
pls do noy Essay
Prioritizing The IT Project Portfolio Essay
Explaining Satisfaction Levels of the Guest of the Three Star Hotels at Kota Bharu, Kelantan
Aussie Portrayal Essay
proposal Essay
pride and prestige Essay
Get inspired and start your paper now!