An Analysis of the Growth Rate during Modern Economic Growth

Abstract

Despite the setback caused by the Second World War, Japan’s modern economic growth has continued from 1886 until the present day — in other words for a full century. The purpose of this chapter is to survey the process of modern economic growth by discussing the level and changes of the growth rate of GNP. In Section 3.1 we put forward a theory (the ‘relative backwardness hypothesis’) to explain why Japan’s economic growth rate in this period has been higher than the growth rates of the developed countries of the west. In Section 3.2 we analyze cyclical fluctuations in the growth rate, ‘long swings’, looking at historical events and their relationship with the ‘upswings’ and ‘downswings’. In Section 3.3 we turn our attention to long-term trends for the growth rate, and the phenomenon of ‘trend acceleration’.