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The "Hidden" Side of the "Flying-Geese" Model of Catch-Up Growth: Japan's Dirigiste Institutional Setup and a Deepening Financial Morass

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  • Terutomo Ozawa

    (Economics, Colorado State University)

Abstract

Japan is in the eleventh year of stagnation with a prolonged financial malaise. Just a little over a decade ago, Japan's Phenomenal growth was admired and even feared as a juggernaut. Japanese scholars and policymakers came to often describe Japan's industrial advance in terms of the so-called "flying-geese" model of catch-up growth, a sanguine expression that has also been played up in the media. Japan once did play the role of Asia's lead goose before the burst of the 1987-1990 asset bubble. The model is useful in capturing the essence of Japan's successful industrial upgrading and Asia's trade-led growth but fails to explain why such a success would ever lead to the present economic predicament. This is because it ignores the institutional, especially financial, underpinnings of Japan's catch-up strategy. What were the key enabling institutional features of Japan's once effective FG catch-up strategy? How did they function? Why did they come to cause the 1987-1990 bubble and the current financial imbroglio? How will Japan be "reformed"? All these developments and issues need to be examined as path-dependent evolutionary events within a reformulated "flying-geese" model, and "institutional" model of FG catch-up.

Suggested Citation

  • Terutomo Ozawa, 2001. "The "Hidden" Side of the "Flying-Geese" Model of Catch-Up Growth: Japan's Dirigiste Institutional Setup and a Deepening Financial Morass," Economics Study Area Working Papers 20, East-West Center, Economics Study Area.
    • Handle: RePEc:ewc:wpaper:wp20
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    References listed on IDEAS

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    Cited by:

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    2. Sakshi AGGARWAL, 2017. "Smile curve and its linkages with global value chains," Journal of Economics Bibliography, KSP Journals, vol. 4(3), pages 278-286, September.
    3. Ginzburg, Andrea & Simonazzi, Annamaria, 2005. "Patterns of industrialization and the flying geese model: the case of electronics in East Asia," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1051-1078, January.
    4. repec:uto:dipeco:201432 is not listed on IDEAS
    5. Lim, Steven & Feng, Gary, 2005. "Dynamic Comparative Advantage: Implications for China," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 1(2), pages 1-16.
    6. Cutler, Harvey & Berri, David J. & Ozawa, Terutomo, 2003. "Market recycling in labor-intensive goods, flying-geese style: an empirical analysis of East Asian exports to the U.S," Journal of Asian Economics, Elsevier, vol. 14(1), pages 35-50, February.
    7. Liu, John Jen-wei & Ray, Pradeep Kanta, 2012. "The ‘Triple-alliance’ perspective for new industry creation: Lessons from the flat panel industry in Taiwan," Journal of Asian Economics, Elsevier, vol. 23(5), pages 585-599.
    8. Chang Woon Nam & Sumin Nam & Peter Steinhoff, 2017. "Modi's 'Make in India' Industrial Reform Policy and East Asian Flying-Geese Paradigm," CESifo Working Paper Series 6431, CESifo.
    9. Chang Woon Nam, 2002. "Significance of Development Stage Theory for Explaining Industrial Growth Pattern between Asian NICs and Selected Advanced Economies," CESifo Working Paper Series 662, CESifo.

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