Untitled Essay Research Paper The Economy of — страница 4

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value did not just only effect the affordability of the housing but also distort the lifestyle of the Japan workers as it had reflect in the earlier incident of the 2 generations mortgage. (6) “During the bubble economy period the zoning regulation in Tokyo has revise to allow builder to built more capital on the piece of land. So this indirectly rises the potential of building space in Tokyo. It will again raised the real estate value, property taxes and traffic congestion level of the area.” According to the (7) “National Land Agency statistic, about half of firms surveyed in the mid to late 1980s responded that they had no development plans for the land that they acquired.” They rarely built homes or apartments, but instead constructed office buildings that would bring

in steady revenues. From the developer*s point of view, houses and apartment are the least profitable projects. So land would almost never allotted for housing”. With land speculation and the shortage supply of new construction on housing the Japanese residents are very difficult to find an affordable place to live beside the houses that are very far from work place. In the current Japan election the percentage of participant voters in Japan has drop below 60% of the total population and the liberal democractic did not receive 50 % of the seat through election. This percentage was the lowest since WWII and mainly was because the populations in Japan no longer believe the liberal democratic party can bring them back from recession. Also they did not have a good control system

during the bubble economy, failure of the recovery program after the bubble splash.(program such as expansion in public investment, lowering the interest rate and series of economic counter measure but the yen is still pretty high which discourage export) In more specific, during the bubble economy the government did not really propose (5) Cao Man Kit, “The Strategic of Japan Enterprise”, Ming Chang, H.K. 1992, pg. 68 (6) Mc Millian Charles, “The Japan Industrial System”, Berlin, New York, 1996 , pg. 56 (7) Wood, “The Bubble Economy”, Sidgwick & Jackson, London 1992 pg. 89an effective tax law until 1990. (National Land Value Tax- prohibitive tax on profits from the sale or transfer of land national land law 1974) This revitalizes the local property tax and

assessment ratio for the fixed asset tax. Another official policy was issue during 1990 was through the financial market in which the government regulates on the loan activity. This eventually slow down the loan activities largely in 1991. But still the government really lagged their response for those who already suffer for 5 years of high housing cost. More over during the period of bubble economy, many politics were either involve in land speculation or was bribe by organize gang group and large enterprise in order for these people to be more conveniently to have more benefits in the land market. One incident is involve by a business man Kyowa and a cabinet minister Fumio Abe, where Abe sold the details of where a new road construction in Hokkaido in return for 480 million

yen. Political scandal was expose to the public not long after the bubble economy was splash. Lastly, most of the asset of the politicians are in the real estate market therefore neither the bank or the officials admit the fall in land prices. So when this incident was expose to the public, the prices of land fall sharply around 50 %. And mainly because of the period of cover up. So many big and small investors suddenly woke up from their happy dreams and face the horrible reality. With the above reasons the government has lost the trust of many Japanese. Therefore the land speculate activities had also effect the image of the strong liberal democratic. During the bubble splash period, many pre-graduates and graduated university students were unable to find jobs in the labor

market due to the diet all companies therefore many students were frustrate about their future. Therefore the supply of the labor market is distorted by the bubble burst. Therefore you can see that the land speculation activities had create many social problems to the Japan society during the bubble period and after the bubble burst.During the bubble period the economy was strongly boost by the sudden rise of land value and stock market. On the other hand the after math of the bubble splash was a pain for the economy. In general we will look at the effects on the rise and fall of the Japan*s economy. In 1985 the trade balance in Japan need to have adjustment therefore the government declare that it needs some force to grow in order to prevent recession during this adjustment