The Japanese Economy “Once upon a time there was a densely populated island nation, which, despite its lack of natural resources, had managed through hard work and ingenuity to build itself into one of the world’s major industrial powers. But there came a time when the magic stopped working. A brief, overheated boom was followed by a slump that lingered for most of a decade. A country whose name had once been a byword for economic prowess instead became a symbol of faded glory (Krugman, 1998)” The preceding paragraph could describe Japan’s economic slide of the 1990s or it could just as easily portray the decline of Great Britain’s economy seven decades ago. Many economists p