THE AUSTRALIAN NATIONAL UNIVERSITY
Second Semester Examinations 2022
JAPANESE ECONOMY AND ECONOMIC POLICY
ECON 2108
Study period: thirty minutes
Time Allowed: three hours
Permitted materials: Open book
To be submitted via Turnitin
Answer FOUR questions only
1. Until the Meiji Restoration in 1868, Japan was an economy virtually closed to
international trade. How did opening up the economy to international trade affect the
structure of the Japanese economy and economic growth?
2. ‘Flexibility of prices and wages were the major factor explaining Japan’s economic
performance through the Great Depression in the 1930s’. How did flexible prices and
wages affect Japan’s response to the Great Depression? Were any other factors
important in accounting for the different experience of Japan and other industrial
economies at this time?
3. The Japanese employment system has been regarded as irrational and paternalistic.
What economic explanations can be offered for the distinctive features of the
Japanese system? Does recent experience suggest the economic costs outweigh the
benefits?
4. Are newspaper commentators correct to describe Japan’s public debt as
“mountainous”? Does the size of the debt pose a problem for the economy now or in
the future? Explain carefully the economic considerations which should be taken into
account.
5. Are there structural impediments to Japan’s economic recovery from the slump of the
1990s or would conventional macro-economic policies be enough to revive growth?
6. ‘Capital accumulation was the motor force of Japan’s early postwar growth.’ Is this
assessment correct and why? Can capital accumulation resurrect Japan from economic
stagnation in the coming decades or are other factors critical to restoring Japanese
economic growth?
7. Until the financial crisis of 1997 and 1998, East Asia enjoyed remarkably high rates
of growth. What accounts for East Asia’s strong growth performance in the last two
and half decades of the 20th century and what are its prospects for the future?
8. “Japan shares a large and growing economic relationship with China even though the
two governments don’t always get along because both countries have pragmatic
business people”. True or false and explain.
9. Assess the benefits and costs of Japan’s Economic Partnership Agreement (EPA) or
free trade agreement strategy. What alternative strategies are there for Japan’s external
economic engagement?
10. Did Japan’s industrial policies work in boosting economic growth during the rapid
growth era?
11. Was Abenomics a success or a failure? Explain why.
12. What factors caused the rapid growth of Australia-Japan trade relations after the
1950s? What are the prospects for Australia-Japan economic relations in the future?

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