The Japanese Economy.

• Author: Bronfenbrenner, Martin

This may be the book that every economic Japanologist and every Japanological economist has been awaiting for 20 years, 25 years, or ever since he or she decided the "Japanese miracle" was "for real" rather than a flash in the pan. It combines in 14 chapters up-to-date literary descriptions of various aspects of the Japanese economy, historical accounts of how some Japanese economic institutions "got that way," and frequent injections of state-of-the-art theoretical analyses (mainly quantitative, in chapter appendices) of problems inherent in the main text of that chapter, suggested by the literature surrounding it, or of special interest to the author. Our author, Professor Ito, was born in Japan in 1950, the year the Korean War began and by my reckoning three years before the take-off of the "Japanese miracle." His education was entirely Japanese until, in the early 1970s, he came to America as a graduate student in economics. Receiving a doctorate at Harvard, he taught there and at the University of Minnesota. His present primary affiliation is a full professorship at Hitotsubashi University in the Tokyo suburbs; he retains secondary affiliations with Minnesota, with the National Bureau of Economic Research and (unofficially) with various trans-Pacific airlines.

After a two-chapter introduction beginning with 1603--the end of nearly 150 years of intermittent civil war by the accession of Tokugawa Iyeyasu to the Shogunate--Professor Ito presents four chapters on macrodynamics. They deal with growth, fluctuations, domestic financial markets, public finance, and macro-policy both fiscal and monetary. This group, which for some readers is the heart of the book, is followed by three chapters essentially micro-economic--industrial structure and policy, labor and industrial relations, saving and capital costs. The next pair of chapters introduces the international economy; one is on trade, the other on finance and exchange rates. I believe the international-finance chapter involves Professor Ito's principal field of specialized economic study. To bring the book to a close, we have three "current events" chapters on controversial matters. Chapter 12 is about the economic conflicts or "frictions" of Japan with the U.S. Chapters 13-14 relate somewhat less directly to the parlous state of economic relations between Professor Ito's (and my) "two countries." The first of this closing pair of chapters deals with the distribution system; the second...