Peace and Prosperity: After years of government propaganda predicting the worst atrocities, most Japanese civilians were surprised at the warmth and friendliness of the occupying forces. The postwar period began, however, with millions of displaced people homeless and starving. To counter a perceived communist threat from the Soviet Union, the US quickly set to work reconstructing the economy by transforming Japan's institutions and devising a new pacifist constitution. Article 9 renounced Japan's right to maintain armed forces, although the ambiguous wording was later taken to permit the creati on of a "self-defense" force. The zaibatsu conglomerates that had proved so instrumental in boosting Japan's militarism were disbanded, later to re-emerge as the keiretsu trading conglomerates that dominated the economy once again. The entire economy received a massive jump-start with the outbreak of the Korean War, with Japan ironically becoming the chief local supplier for an army it had battled so furiously just a few years earlier. The occupation lasted until 1952, having already planted the seeds for Japan's future stunning economic success. Economic output was back to prewar levels, and British auto companies provided the support needed to get Japan's auto industry back on its feet. Japanese companies then enthusiastically imported any Western technologies they could get their hands on. This included transistor technology — invented in the US but then considered to have only limited applications — for the surreal sum of $25,000. It was Japan that produced the world's first transistor radio. The electronic technology spurt that followed is now legendary. Parliamentary democracy finally came into its own, albeit with distinctly Japanese characteristics reflecting the dislike of debate and confrontation and the group-oriented preference for maintaining the appearance of harmony at all times. The government, through the powerful Finance Ministry and Ministry of International Trade and Industry, generously supported favored private corporations: first shipping, then cars, then electronics firms basked in the warmth of the government's loving attentions. Japan overtook Britain economically in 1964. By the end of the decade, Japan's was the third largest economy in the world — less then two decades after the war had left the country in ruins. Prosperity was not without its own problems: pollution caused by "dirty" industries, a high incidence of stomach ulcers (even suicides) among schoolchildren pressured by over-ambitious parents, and the awkward questions of what to do about nuclear energy. The famous coziness among politicians, bureaucrats, and private companies, together with the strong cultural emphasis on relationship-building and a lack of transparency and accountability, eventually led to corrupt practices of endemic proportions. 
Japan was the third largest economy by the end of which decade?
1970s