Japan Facing Economic Maturity

According to the author, Japan is today facing major economic adjustments brought on by earlier successes. At the heart of the problem is Japan's excess of domestic savings over investment, which came about as a result of the slowdown in economic growth in the 1970s. Japan has relied excessively on export expansion to keep the economy going and has adopted macroeconomic policies without adequate consideration of the international consequences of such policies. Japanese policymakers initially failed to realize that reliance on export growth would increase tensions with the United States, and they now underestimate the adjustments that will be necessary for Japan as the United States begins to get its own house in order.