Japan is an exception. The long aftermath of the “bubble economy” period, together with a declining population and generally low rates of return on capital, have made Japan a much less significant source of dynamism for the region and the world than it was for the couple of decades up to 1990. In truth, though, the global economy has become used to this.
How is it that the Asian story has been so different to that of the North Atlantic? The first important factor was that Asia did not have a banking crisis. In fact, most countries in the world didn’t have one. The extraordinary events of September and October 2008 put immense pressure on markets, and banks everywhere inevitably felt the effect of that.