Economic history
Modern Japan's economic growth began in the Edo period. Some of the surviving elements of the Edo period are roads and water transportation routes, as well as financial instruments such as futures contracts, banking and insurance of the Osaka rice brokers.[104] During the Meiji period from 1868, Japan expanded economically with the embrace of the market economy.[105] Many of today's enterprises were founded at the time, and Japan emerged as the most developed nation in Asia.[106] The period of overall real economic growth from the 1960s to the 1980s has been called the Japanese post-war economic miracle: it averaged 7.5 percent in the 1960s and 1970s, and 3.2 percent in the 1980s and early 1990s.[107]
Growth slowed in the 1990s during the "Lost Decade" due to after-effects of the Japanese asset price bubble and government policies intended to wring speculative excesses from the stock and real estate markets. Efforts to revive economic growth were unsuccessful and further hampered by the global slowdown in 2000.[2] The economy recovered after 2005; GDP growth for that year was 2.8 percent, surpassing the growth rates of the US and European Union during the same period.[108]
As of 2012, Japan is the third largest national economy in the world, after the United States and China, in terms of nominal GDP,[109] and the fourth largest national economy in the world, after the United States, China and India, in terms of purchasing power parity.[7] As of 2014, Japan's public debt was estimated at more than 200 percent of its annual gross domestic product, the largest of any nation in the world.[110] In August 2011, Moody's rating has cut Japan's long-term sovereign debt rating one notch from Aa3 to Aa2 inline with the size of the country's deficit and borrowing level. The large budget deficits and government debt since the 2009 global recession and followed by earthquake and tsunami in March 2011 made the rating downgrade.[111] The service sector accounts for three quarters of the gross domestic product.[112]