How did a devastated Japan become one of the world's largest economies in a generation?

A mix of luck, policy and ordinary people's savings, over about two decades. The Japanese economic miracle is the name for the growth that followed the Second World War, usually dated from about 1955, when income per person recovered to its pre-war level, until the 1973 oil crisis. Between 1957 and 1973 the economy grew at an annualised rate of around 10 percent.

It began from ruins. Japan had lost all its colonies, its industry and population were heavily damaged, and shortages caused hyperinflation. Then US policy changed: instead of weakening Japan, it tried to help rebuild it, in a democratized form, to prevent the spread of communism. When the Korean War broke out in 1950, the US bought military supplies from Japan, and orders to repair planes and vehicles saved heavy industries that were on the verge of bankruptcy.

At home, the growing middle class provided consumers and bank savings, which banks lent to companies for investment. The Ministry of International Trade and Industry, MITI, helped guide industry. According to some scholars, no other government organisation had more economic impact.

A story from 1960 shows how politics shaped it. After mass protests against the US-Japan Security Treaty, Prime Minister Hayato Ikeda launched the Income Doubling Plan, which aimed to double the economy in ten years, partly to shift the national conversation from political struggle toward growth. The plan called for 7.2 percent yearly growth. Actual growth averaged more than 10 percent, and the economy doubled in under seven years.

By the end of the boom Japan had become the world's third-largest economy, after the United States and the Soviet Union. In 1973 the first oil-price shock, which raised oil from 3 to over 13 dollars per barrel, ended the miracle.