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The "hidden" side of the "flying-geese" model of catch-up growth : Japan's dirigiste institutional setup and a deepening financial morass

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Title: The "hidden" side of the "flying-geese" model of catch-up growth : Japan's dirigiste institutional setup and a deepening financial morass
Authors: Ozawa, Terutomo
LC Subject Headings: Japan - Economic conditions - Econometric models
Stagnation (Economics)
Business cycles - Japan
Issue Date: 2001
Publisher: Honolulu: East-West Center
Series/Report no.: East-West Center working papers. Economics series ; no. 20
Abstract: Japan is in the eleventh year of stagnation with a prolonged financial malaise. Just a little over a decade ago, Japan's phenomenal growth was admired and even feared as a juggernaut. Japanese scholars and policymakers came to often describe Japan's industrial advance in terms of the so-called "flying-geese" model of catch-up growth, a sanguine expression that has also been played up in the media. Japan once did play the role of Asia's lead goose before the burst of the 1987-1990 asset bubble. The model is useful in capturing the essence of Japan's successful industrial upgrading and Asia's trade-led growth but fails to explain why such a success would ever lead to the present economic predicament. This is because it ignores the institutional, especially financial, underpinnings of Japan's catch-up strategy. What were the key enabling institutional features of Japan's once effective FG catch-up strategy? How did they function? Why did they come to cause the 1987-1990 bubble and the current financial imbroglio? How will Japan be "reformed"? All these developments and issues need to be examined as path-dependent evolutionary events within a reformulated "flying-geese" model, an "institutional" model of FG catch-up.
Description: For more about the East-West Center, see http://www.eastwestcenter.org/
Pages/Duration: 30 pages
URI/DOI: http://hdl.handle.net/10125/3678
Appears in Collections:Economics [Working Papers]



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