JAPAN'S DECADE-LONG RECESSION

This paper attempts to analyze the structure of the decade-long Heisei Recession by clarifying the relation of the causes and effects of the recession from the start of the bubble in the 1980s to the end of the recession in 1999. It is revealed that the reason why the Heisei Recession was so long and so severe lies in the fact that, because two causes of the recession (the continuous fall of land prices and the insolvency of financial institutions) were new for the Japanese, the government made errors in finding policies appropriate to overcome the recession. It was after passing the 'nightmare' in the autumn of 1997 that the government established a system of financial stability which enabled the Japanese economy to get out of this recession. However, there are several tasks with which the Japanese economy has to cope in the near future