Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 17, No. 1, pp.85-115
ISSN: 1225-0279 (Print)
Print publication date 29 Feb 2004
Received 02 Feb 2004 Revised 13 Mar 2004

The American Great Depression and the Japanese Heisei-Era Depression Compared-From an Institutional Approach

Tokutaro Shibata
Professor, Graduate School of Economics & Faculty of Economics, University of Tokyo, Hongo, Bunkyo-ku, Tokyo 113-0033, Japan, Tel: +81-3-5841-5613, Fax: +81-3-5841-5521 shibata@

JEL Classification: G15, G21, G32, N22


This paper investigates the institutional causes of the Japanese Depression in the 1990s in comparison to those of the America Great Depression in the 1930s. The Japanese Depression has two similarities to the American Depression. (1) Both depressions followed the bubble economy. (2) The decades of the 1930s and 1990s were historical transition periods. The institutional causes of the bubble economy in Japan were following: (1) instability of the international monetary system, (2) transformation of the financial system from “regulation and relief” to “deregulation and relief,” (3) transformation of the industrial relations, (4) the Japanese domestic institutions such as the cross-shareholding system, the tax system, “the land standard,” and the underdeveloped welfare system. These institutional factors are currently obstructing economic recovery.


Japanese depression, Great Depression, Bubble economy, Deregulation, Cross-shareholding system, The land standard


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