Friday, 3 January 2014

Babaru Keizai

Babaru Keizai, in Japanese, refers to 'Bubble Economy'. It points to the period before the sudden slowdown experienced in Japan in the early 90's. 1980's were characterized by huge investments in the real estate sector and the stock markets, to the extent that organizations in the manufacturing domain preferred to issue debentures and invest the money in stock markets in place of manufacturing. This kind of investment was referred to as 'Zaitech'. A large portion of these debentures were sold abroad. 

Prices in real estate and stock markets drove up the inflation rate in Japan and liquidity decreased considerably in the late 1980's as compared to the start of the decade. Individuals invested their savings while corporations and their pension funds were investing their surplus funds in stock markets; banks were lending for these speculative investments in real estate and stocks.


  1. i would suggest you to either change the back ground or the font color of the links, as it's very hard to navigate at times as the links are not visible....gr8work

  2. Understood that Investment in real estate and stock market causes inflation....but why do they cause the formation of a bubble? money is still there (in form of investments) and can be flown back in the market...isn't it? this backflow would mitigate the inflationary bubble...

    1. Stock prices fell and organizations went bankrupt with huge debts outstanding