| Abstract : | This paper focuses on the Japanese financial crises in the 20th century, including an appendix, in which I will present an aspect of how the U.S. economy did not take lessons for the perennial Japanese banking crisis and, as a result, experienced a vast economic calamity with the recent financial debacle in 2007-2008. I am going to describe each Japanese financial and/or banking crisis according to the Kindleberger-Minsky's model so as to have a better and clear aspect of how each crisis unfolds, following the steps; displacement, credit expansion, euphoria-overheat of the economy, mania-overtrading, financial distress, crisis (panic and/or crash) giving emphasis on those occurred in 1920s and 1990s. The following chapters are referred, at first, to Japan's post-WWI banking crisis affected by its domestic housing market bubble owing to the Great Kanto earthquake. On the next level, I give a description of the Japanese economic boom during the period 1950-1973. In order to overcome rapidly the negative adverse effects of the WWII, the Japanese authorities offered the necessary “window guidance” to corporations. As an outcome of this action, Japan managed to possess the second in ranking among the largest economic powers worldwide. Moving forward, I investigate the causes of the Japanese asset bubble in the last decade of the 20th century and illustrate its chronic economic impasse, which is characteristically mentioned, in accordance to many scholars, as “Japanese two lost decades”. Having an overview of the latest Japanese banking crisis, I decided to give a brief reference to the recent U.S. subprime mortgage crisis (2007-2008), from the aspect of what U.S. should have done so as to have avoided an “American (two) lost decade(s)” taking lessons from the Japanese experience.
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