3 ms·
look up the plaza accord. It led to a bubble that eventually burst and an uncompetitive export industry as the JPY doubled.
by dworks 1y ago
look up the plaza accord. It led to a bubble that eventually burst and an uncompetitive export industry as the JPY doubled.
- jcfrei 1y agoTwo sides of the same coin. The yen appreciation didn't change the trade deficit the US had with Japan substantially. Japan's own actions after the plaza accord (very loose monetary policy) lead to the asset bubble I described. That's because domestic consumption was weak and everyone used excess savings for the housing market - rather than buying more goods domestically. Which lead to the bubble I described.
- dworks 1y agoIf you read the Wikipedia article more carefully you would have understood that the loose monetary policy was an effect of the Plaza Accord, hence why I mentioned it.