Abstract: The divergence of the virtual economic index and the real economic index can be used to examine Japanese economy.An economyis considered to have a serious bubble when the annual growth rate of the stock price deviates from the annual growth rate of the enterprise investment by more than 3.93%, or when the annual growth rate of the land price deviates from the annual growth rate of the enterprise investment by less than -0.46%. The results show that the average bubble degree of the Japanese economy in 1986-1989 was 18.56%, and the average bubble degree of the Japanese economy in 1986-1990 was 12.04%. Judging whether the economic bubble of a country has occured should be based on the degree of deviation between the virtual economy and the real economy during the normal period of macroeconomic operation. Meanwhile,the degree of economic bubble should be the average of a period.

Key words: Japan’s economic bubble, stock price, land price, corporate investment