Causes of Japanese Real Estate Bubble and Post-crisis Policy Analysis

In the late 1980s and early 1990s, Japan experienced a serious real estate bubble bursting and economic crisis. The crisis had a profound impact on the Japanese economy and led to the so-called "lost decade." Starting from the formation mechanism of the Japanese real estate bubble, this paper analyzes the economic and policy causes behind it, including monetary easing, insufficient supervision and speculative psychology. After the bubble burst, the Japanese government adopted a series of monetary and fiscal policies in response to the crisis, for example, lowering interest rates, implementing quantitative easing, and launching fiscal stimulus programs. These policies played a positive role in stabilizing the financial system, but the economy was Mired in a prolonged downturn because structural problems were not fully addressed. This paper takes Japan's economic policies in the period of the bubble economy as the starting point, discusses the dual role of the policies in stimulating economic growth and causing the bubble to burst, analyzes the root causes of policy failure and its far-reaching impact on financial stability.