Choose a factor and test it against the evidence.
Which factor best explains Japan's transformation?
Government intervention
- MITI chose industries.
- Savings steered to industry at low interest.
It directed resources into high-growth sectors.
Some firms succeeded despite MITI.
The keiretsu system
- Main banks gave patient credit.
- Just-in-time supplier networks.
It let firms invest for the long term.
It was closed to outsiders and protected weak firms.
Socio-economic changes
- Workers moved from farms to factories.
- Households saved about a fifth of income.
It supplied labour, savings and demand.
It needed policy and firms to use it well.
International developments
- The US alliance and market.
- Korean War orders.
It created opportunities, especially in recovery.
Later shocks, such as the Plaza Accord, also caused harm.