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1955-1973 CEReputable source · 2 sourcesWell documented

Japan's Economy Grows at 10 Percent a Year for Two Decades

A defeated, occupied country becomes one of the world's largest industrial economies inside a single generation

On the timeline · around 1955-1973 CE · Postwar and Contemporary JapanMeiji Japan and the Age of EmpirePostwar and Contemporary JapanJapan's Economy Grows at 10 Percent a Year for Two Decades193019401950196019701980

Quick facts

Growth period
c. 1955-1973
Peak annual growth rate
c. 10 percent
OECD membership
1964
GDP vs. US/UK by 1973
95% of Britain's, 69% of the United States'

What happened

From the mid-1950s until the oil shocks of the early 1970s, Stanford's SPICE program notes, "the Japanese economic pie grew at an annual rate of ten percent from the mid-1950s until the Arab oil shocks of the early 70s." Nippon.com's analysis puts the earlier recovery period (1945-1956) at 7.1 percent annual per-capita GDP growth. Government economic planning helped drive it, with the state helping "determine what is produced" and allocate capital through control of the financial system, while a highly educated workforce and high domestic savings rates funded rapid industrial investment. Exports were not the initial engine, substantial export growth did not begin until the 1960s, but once underway they reinforced an economy already growing on the strength of heavy industry and a fast-expanding middle class.

Why it matters

By 1973, the last year of what economists call Japan's "rapid-growth era," Japan's per-capita GDP had risen to 95 percent of Britain's and 69 percent of the United States', a rapid convergence with the world's most advanced economies within a single generation of total wartime defeat. This growth funded Japan's emergence as the world's second-largest economy and set expectations that would make the country's subsequent stagnation, after the bubble burst in 1991, feel especially dramatic by comparison.

How we know

Japan's postwar growth rates are documented through national GDP statistics tracked by Japanese government agencies and cross-referenced by international bodies including the OECD, which Japan joined in 1964.

Sources

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