Despite recent upheavals, Japan remains one of the dominant economic powers at the end of the twentieth century. Yet the Japanese economy is one of the most misunderstood phenomena in the modern world. Conventionally, Japan is presented as the exception to mainstream economic theory: an exception to the standard models of modern economics. This book demolishes that notion, bringing the full analytical power of economic thought to all aspects of the most dramatic economic success story in recent times. Written for advanced undergraduate and graduate courses, this book will be indispensable both for students and instructors alike. Lucid explanations and comprehensive and rigorous analysis make it a natural choice for anyone interested in comprehending the rise of the Japanese economy.