threads / economic system #304

14 newly added in the last 14 days mark read

1. 1955 new

   Commercial Law Article 280 amended

   also in Princes of the Yen: Japan built, bubbled, and broken

   In 1955 the Diet revised Paragraph 2 of Article 280 of the Commercial Law, allowing company boards to issue additional shares and assign them to each other without approval from current stockholders, enabling cross-shareholding takeover defenses.

   • “The new provision allowed the board of a company to issue additional shares and assign them to each other—that is, they dilute the present stock of shares without obtaining formal approval from the current stockholders.”

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2. September 1955 new

   Japan joins GATT

   also in Occupation Japan keeps the controls, Princes of the Yen: Japan built, bubbled, and broken

   Japan attained GATT membership in September 1955, having secured exemptions to the membership rules; the Diet revised the Commercial Law the same year to enable takeover defenses.

   • In 1955, just in time for GATT membership in September of that year, the Diet revised and amended Paragraph 2 of Article 280.

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3. 1960 new

   Ikeda becomes prime minister with the income doubling plan

   also in Princes of the Yen: Japan built, bubbled, and broken

   Hayato Ikeda became prime minister in 1960 and made the income doubling plan his cabinet's major policy aim, with fiscal expenditures rising more than 25 percent per year on the back of high growth.

   • When Hayato Ikeda became prime minister in 1960 and his cabinet made the “income doubling plan” its major policy aim, fiscal expenditures increased by more than 25 percent per year.

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4. 1961 new

   First round of Japanese trade liberalizations

   also in Princes of the Yen: Japan built, bubbled, and broken

   Japan carried out its first round of trade liberalizations in 1961, but the United States remained dissatisfied and demanded the abolition of Japanese import restrictions to reduce the trade imbalance.

   • The first round of trade liberalizations had taken place in 1961, but the U.S. side was dissatisfied and demanded abolition of Japanese import restrictions in order to reduce the trade imbalance.

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5. July 1965 new

   Window guidance abolished again

   also in Princes of the Yen: Japan built, bubbled, and broken, The Bank of Japan's window-guidance machine

   With window guidance attracting public attention after the Yamaichi episode, the Bank of Japan once more abolished the credit controls in July 1965, though the controls continued informally.

   • As window guidance had again caught some public attention, it was once more abolished in July 1965.

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6. c. 1965 new

   Run on Yamaichi Securities and forced BoJ rescue

   also in Paper money, central banks, and credit creation, Princes of the Yen: Japan built, bubbled, and broken

   After stocks crashed, the fourth biggest broker Yamaichi Securities suffered a customer run, and Finance Minister Kakuei Tanaka demanded that the Bank of Japan extend unlimited credit to Yamaichi and expand credit creation, which the legally subordinate BoJ had to do.

   • As small investors pulled their money out of the market, the fourth biggest broker, Yamaichi Securities, experienced a run by its customers. Finance Minister Kakuei Tanaka was quick to take appropriate action. He went straight to the Bank of Japan and demanded unlimited credit for Yamaichi Securities and an increase in credit creation for the economy.

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7. 1966 new

   Cross-shareholding program completed

   also in Princes of the Yen: Japan built, bubbled, and broken

   By 1966 the program to boost stable cross shareholdings among Japanese firms was virtually completed, and Article 280 was modified again to give the appearance of propriety and avoid foreign criticism.

   • By 1966, the program to boost stable cross shareholdings was virtually completed. To prevent the possibility of criticism from abroad, the bureaucrats and business leaders decided to modify Article 280 to give the appearance of propriety.

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8. 1970 new

   Japan becomes the world's second-largest economy

   also in Princes of the Yen: Japan built, bubbled, and broken, Reichsbank: independence, hyperinflation, and Hitler

   Between 1960 and 1970 Japan's real GDP rose 2.6 times, and by 1970 it had overtaken Germany to become the number two economic power in the world.

   • By 1970, Japan had overtaken Germany and soared from the ashes to become the number two economic power in the world.

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9. 1970 new

   Zenith files dumping suit against Japanese television makers

   also in Princes of the Yen: Japan built, bubbled, and broken

   In 1970 the U.S. television maker Zenith filed a suit charging that Japan was dumping television sets in the United States, an early episode in the escalating U.S.-Japan trade disputes.

   • In 1970, the U.S. television maker Zenith filed a suit charging that Japan was dumping television sets in the United States.

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10. November 1973 new

    Oil shock hits Japan

    also in Princes of the Yen: Japan built, bubbled, and broken

    The oil shock of November 1973 sent oil prices jumping and triggered panic buying of consumer staples in Japan, including the legendary Osaka toilet paper run.

    • All this happened before the oil shock of November 1973. The sudden jump in oil prices did not assuage the situation (although it was mitigated by the strong yen).

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11. 1974 new

    Inflation peaks with 26 percent consumer price rise

    also in Princes of the Yen: Japan built, bubbled, and broken

    In 1974, following the credit boom and oil shock, Japan's consumer price index rose 26 percent year-on-year and the wholesale price index 37 percent, creating social friction.

    • In 1974, the consumer price index rose 26 percent year-on-year (YoY) and the wholesale price index 37 percent.

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12. 1976 new

    Industrial production recovers after BoJ loosens credit

    also in Princes of the Yen: Japan built, bubbled, and broken, The Bank of Japan's window-guidance machine

    After the BoJ raised its window guidance loan growth ceilings in late 1975 and early 1976, industrial production recovered in late 1976, regaining its October 1973 peak and ending Japan's worst postwar slump.

    • In late 1976 industrial production finally recovered, and reached its previous peak levels of October 1973 again. Japan’s worst postwar slump was ending.

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13. 1979 new

    MITI's 'samurai plan' aircraft leasing scheme

    also in Princes of the Yen: Japan built, bubbled, and broken

    In 1979 MITI promoted a leasing scheme, devised with Japan's top banks, to cosmetically reduce the current account surplus by booking foreign aircraft leases as Japanese imports; MoF called it off after a year fearing IMF scrutiny.

    • In 1979, MITI thought that the scheme was a “trump card in reducing the surpluses” by an estimated $800 million in fiscal 1979 alone.17 The Ministry of Finance, worried that the IMF might see through the scheme, called it off after a year.

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14. December 1980 new

    Japan liberalizes capital flows

    also in Princes of the Yen: Japan built, bubbled, and broken

    Japan liberalized its international capital flows in December 1980, a major departure from the old economic structure that later served as a parallel to Thailand's deregulation.

    • There is no doubt that, as with Japan’s liberalization of capital flows in December 1980, this marked a major departure from the old economic structure.

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