Abstract: After World War II, some economies in Europe and East Asia experienced an economic growth miracle. It was followed, however, by a decline in traditional growth momentum that limited further growth and incurred public dissatisfaction. Some European countries were mired in stagflation for more than a decade, while Japan entered the era of "Japan as Number One". Policies that enabled the growth miracle were no longer fit – as the complexity of the economy increases, productivity growth can be achieved only by letting the market play the leading role in resource allocation. Aggregate demand management requires the right tools instead of structural policies, and monetary and fiscal policy could be applied in overcoming the lack of endogenous market demand. In addition, improving social welfare becomes inevitable. Therefore, the social security system needs to timely adjust to the challenges it faces.
Keywords: growth miracle, economic policy, social welfare
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