The Heisei boom more or less coincided with the so-called bubble period, when the expectations of a wide range of economic entities turned excessively bullish and, as a result, investment and consumption activity became overheated. These phases have similarities as well. One notable similarity is that all four phases witnessed a tighter labor market than the periods before and after them.
This past experience offers valuable insights into how the current acute labor shortages may affect wages and prices. More specifically, the experience of the past three recovery phases can provide us with important clues as to how the current labor shortages could transform Japan's economy going forward.