Whose lost decade? Japan’s economy works better than pessimists think-at least for the elderly

January 3, 2012 • Daily Email Recap

Thanks to Bill Ryerson for suggesting this article, originally sent in by Jim McDonald. Arguably, the people living on the island of Japan have achieved at least one aspect of what many seek for the whole planet: a generally stable, gradually declining population. See The Economist: http://www.economist.com/node/21538745

Whose lost decade?

Japan’s economy works better than pessimists think-at least for the elderly

Nov 19th 2011 | TOKYO | from the print edition

THE Japanese say they suffer from an economic disease called “structural pessimism”. Overseas too, there is a tendency to see Japan as a harbinger of all that is doomed in the economies of the euro zone and America-even though figures released on November 14th show its economy grew by an annualised 6% in the third quarter, rebounding quickly from the March tsunami and nuclear disaster.

Look dispassionately at Japan’s economic performance over the past ten years, though, and “the second lost decade”, if not the first, is a misnomer. Much of what tarnishes Japan’s image is the result of demography-more than half its population is over 45-as well as its poor policy in dealing with it. Even so, most Japanese have grown richer over the decade.

In aggregate, Japan’s economy grew at half the pace of America’s between 2001 and 2010. Yet if judged by growth in GDP per person over the same period, then Japan has outperformed America and the euro zone (see chart 1). In part this is because its population has shrunk whereas America’s population has increased.

To read the full article, please click here: http://www.economist.com/node/21538745


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