Japan’s economy over the last two decades has been characterized with such contradictory factors as low growth, low consumption, low capital investments, low unemployment, high productivity and high liquidity. Why hasn’t low unemployment, high productivity and high liquidity not resulted in higher growth? The reason lies in the dynamism of demographics. Declining working age population and rising senior age population, together with international cost competition and innovations in automation, have ended in a society that produces more while consuming less. Neither more monetary easing nor more public investment has proved themselves to be effective. To make things worse, China, Korea, Taiwan and Singapore are about to see their working age population start declining within the next few years. Continental Europe and Russia are following the same track.
What can we do to cope with this phenomenon?
What should we expect? Let us learn from Japan's experience from the last twenty years.
More About the Speakers
Chief Research Economist, The Japan Research Institute
Director, Asian Studies Center