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country’s institutions. The present brief Assessment draws together some of the findings in trying
to address the following three major questions:
(i) what are the most important reasons for the
unprecedentedly disappointing performance of
the last decade?
(ii) what policies could the authorities adopt to
restore somewhat higher rates of growth in the
short to medium term?
(iii) what is the outlook for Japan’s longer-run
future and, in particular, for its distinctive economic model? II. WHAT WENT WRONG?
As noted in the Introduction, Japan’s recent economic performance has been very disappointing,
with growth slowing down to a rate well below that
recorded in the OECD area (Table 1). This is in
sharp contrast to anything seen since the war.
A decade of virtual stagnation has had significant
effects. In particular, Japan’s enviable full employment record has been gradually eroded. While open
unemployment remains low by European standards,
it has, in 2000, crept above United St...
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