The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80s And the Dramatic Bust of the '90s

by Christopher Wood

The Bubble Economy tells the story of the greatest failure of Japanese economic management since 1945. In the second half of the 1980s Japan's financial madness and arrogance centered on a booming stockmarket and rocketing land prices, which dragged the solid manufacturing economy into a whirlwind of outrageous speculation. Then the boom when spectacularly bust, leaving in its wake a withered stockmarket, crashing land prices, mountains of bad loans, an economy in recession, and a slew of political and financial scandals, graphically exposing the seedy underbelly of Japan's feudal finance system. The Bubble Economy reveals how Japan is spending the first half of the 1990s paying off these excesses in a process that threatens the world's economies with dire consequences, and questions many of the myths built up around Japanese management, pointing to levels of incompetence never before thought possible.

Genres: Economics, Japan, History, Nonfiction, Business, Japanese History

224 pages, Paperback

First published October 1, 1992

About the author

Librarian Note: There is more than one author by this name in the Goodreads database.

Described by London’s Telegraph newspaper as ‘the first to predict the US sub-prime meltdown’, Christopher Wood is best known for his weekly GREED & fear newsletter. He’s been ranked No.1 Asian equities strategist every year since 2002 by either Asiamoney or Institutional Investor and usually by both. A former finance journalist with the Far Eastern Economic Review and The Economist, Wood is also the author of Boom & Bust, The Bubble Economy and The End of Japan Inc. He also wrote the CLSA milestone research report, The Real Pacific Century: Asia’s Billion Boomers.

Reviews

[Lewis Johnson · Rating 5 out of 5]

This is the most well known of Mr. Wood's books. Its a prescient analysis of the forces of deflation and overindebtedness that would plague Japan for decades, 27 years by my counting as of now. At the time 99% of the world's financial observers saw Japan taking over the world. Chris knew better and wrote about it in this thoughtful tome.

Its an excellent primer on the forces of deflation that are starting to plague the U.S. and Europe, and is a must read if one is to understand the pernicious dead weight of overindebtedness. Too easily and too readily do people fall into the trap of inflationary thinking, seeing inflation behind every rock, when the deeper truth is that debt is someone's asset and that someone expects to be repaid. This truth lies behind the ever-slowing economies of the world - following in the well-trod path of Japan who showed the world the way almost three decades ago. For this reason this book is a classic and deserving of a thoughtful read.

[Berk Gurhan · Rating 1 out of 5]

The views that this book puts forth are extremely bias and, at times, racist. Not only does it make derogatory comments towards the Japanese as a people, it gloats in the post-bubble era bust revelling in a childish and repulsive schadenfreund. Shocking to see this get past the editors and make it to the shelves as a piece of 'business' literature.

[John · Rating 3 out of 5]

Very thoughtful and interesting read describing the Japanese asset bubble into the early 1990s. Laid out a little formally but some good stories weaved in. Author clearly knows his stuff.

[John Curtice · Rating 5 out of 5]

Excellent details that I haven't been able to find elsewhere in English language material - Balance sheet recessions are our future.

[Christopher Benassi · Rating 5 out of 5]

This book was held extreme foresight considering it was written in 1993. It predicted the innumerable, inherent problems underlying Japan’s economy. From the gangs’ presence with financial institutions, collateralized loans against inflated land prices, impetuous investments and project developments, misunderstandings of investment instruments, and cross-shareholding….Japan had immense issues to face. It only slightly explored inflation and deflation of the yen, but this was an extremely well-detailed and written book with interesting facts littered throughout the text.

[Jeremy Raper · Rating 4 out of 5]

A very good primer on the Japanese bubble economy; covers all the key actors (banks, METI, government, retail etc) and is both surprisingly readable and concise (couple hundred pages). Good place to start before further study on the topic.