Thursday, April 29, 2004

Japanese bubbles

Dear all,

a question relating to Paurav's points relating to the Japanese economic collapse. My understanding is that it was caused by interest rate hikes following years of boom and asset price inflation. The crash was so great that banks and companies bad debt led to mass bankruptcy and hit individuals very hard in terms of stock market collapse and falling asset prices. Lack of confidence has since hit the ability of the authorities to rekindle eocnomic activity.
Paurav made reference to the type of production - ie Japan producing high quality/low price goods and thereby being surpassed by South Korea. To what extent was that a contributing factor considering the wider macro-economic issues?
I'm very interetsed in Japan fundamental economics and recovery from the share price perspective!