GARDNER ACKLEY

Japan's macroeconomic problem was not lack of demand - the bane of the 1930s in the United States and the persistent American fear in the early postwar period - but too much domestic demand, fueled not by consumption growth but by the extraordinary expansion of private business investment, the major engine of Japan's ongoing rapid growth in the mid- and late 1950s, and for two more decades. [...] exports were key, but not as a source of aggregate demand. [...] occasional balance of payments difficulties required macroeconomic tightening; cyclical slowdowns were a deliberate part of the macroeconomic growth policy process, not occasional events requiring contracyclical policy as it was perceived in the United States.