The Yen Appreciation and the International Economy

The decision of the Group of Five countries to appreciate the yen during the Plaza accord was of momentous significance for Japan because this was the sharpest appreciation among the leading currencies in the recent past. Doubling the value of a currency in such a short timespan could have led to a stifling of the economy, but instead of being smothered the Japanese economy - after the brief endaka recession - entered the longest upswing of the business cycle of the postwar period. The author assesses how both developing and industrialised economies felt the full force of this post-appreciation Japanese economic expansion.