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Japan: A Dual Economy

Japan: A Dual Economy

(p.23) Chapter Two Japan: A Dual Economy
The Power of Productivity
William W. Lewis
University of Chicago Press

This chapter presents an analysis of the Japanese economy. It suggests that despite Japan's stature as an economic powerhouse, its condition is precarious. All the factors that economists traditionally think contribute to economic prosperity are not enough for Japan. Despite the unrivaled success of such big names as Honda, Sony, and others, the Japanese severely distort competition in most of their markets where goods and services are sold. There, productivity ranks among the middle-income countries, not the richer ones. These product market distortions simply overpower labor and capital market factors, and limit the potential influence of macroeconomic policy.

Keywords:   Japanese economy, competition, productivity, product market, macroeconomic policy

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