World Trade: The Overheated Boom

Late last winter, when he launched his ten-year "People's Income Doubling Plan," Japan's Prime Minister Hayato Ikeda decided that his nation's economic growth rate (a phenomenal 17.7% in 1960) would soon stabilize at an average 7% a year. On that basis, he calculated, Japan could boost its gross national product from null $39.8 billion to $72 billion by 1970. But last week Japan's growth rate was still clipping along at over 13%—and the Japanese economy was suffering from too much boom.

Japan's businessmen are expanding their plants at an unprecedented rate, largely with imported heavy machinery. And as the benefits...

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