Has Japan Mastered Economic Stagnation?
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Japan was once on track to become the world’s largest economy, but after decades of stagnation, that future never came. From the post-war boom to the Plaza Accord, risk-averse business culture, and an aging population, Japan’s rise and plateau have fascinated economists for years. Yet, despite its economic slowdown, the country still enjoys high job security, low inflation, affordable housing, and a high quality of life. But can any country remain stagnant forever without serious consequences? Or has Japan found a way to defy economic expectations? Let’s dive into the paradox of Japan’s economy and what it means for the future.
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20 Comments
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This is a very interesting topic; thank you for unpacking it. Makes me recall discussions with colleagues years back about steady-state economies. I'm a bit surprised that concept wasn't mentioned here.
I wish more people, especially those with far greater economic knowledge than me, would publicly talk about these. I doubt we'll need to go steady-state on everything (there may be nearly infinite opportunities available on many avenues of human endeavor), but there will surely be several that will require equilibrium.
The plaza Accord😂😂😂😂😂😂
When we looked into the annual working hours, Japan had 1,611 hours and America had 1,799 hours, which means America has 188 hours more.
However, as pointed out in the video, Japan has a hidden figure called unpaid overtime, so if we take into account the actual survey of unpaid overtime in Japan,
we can predict that the working hours in Japan and America are about the same. However, this is if we assume that unpaid overtime in America is 0 hours,
so it is unlikely that it is 0 hours, as there are lawsuits for unpaid overtime in America as well.
In addition, the number of holidays per year in Japan is 136.6 days, which is almost the same as France and Italy's 138 days.
Thirty years ago, the annual working hours in Japan were 2,100 hours, but now it is 1,600 hours, which means that it is 500 hours less than 30 years ago.
Stagnation is probably fine but what is rising in Japan is income tax, which is not a good combo with rather stagnant salaries
Japan has been in a prolonged recession simply because the Ministry of Finance, for the sake of its vested interests, repeatedly implemented unnecessary tax hikes.
"The expectation is this growth would continue forever." And therein lies the problem. Economists think they can just increase growth indefinitely. 2% every year, forever. When this doesn't work. Not in economics or even basic physics. Eventually, there is going to be a snapback. And Japan's 0% growth might look pretty good when other countries are in -1 to -5%. We could see a future where people are once again praising Japan for it's strong economy. But not for it's growth. But rather because it's one of the few to not decline. Of course, this is just one possible future. But I have more faith that Japan could weather a global recession over many other nations.
Discrimination in Japan is crazy. I saw so much in my time working there and heard the same from friends in other companies. Foreigners get more work on their table, no or fewer promotions, awful comments, and massive discrimination in housing. Japan doesn't care about anyone not ethnically Japanese.
Is it just me, or does a lot of scenes in this feel like they're straight out of the Yakuza: Like a Dragon games? Great video, by the way!
The inheritance tax, going up to 55%! Are there other developed countries with such high levels (in direct line, meaning parents to children)? I'm sure it has also some indirect impacts, maybe it's one less incentive to concentrate unimaginable wealth into one person – if more than half will go to the state, why bother?
You said… protect them… so you change them as humans battery… now you anger… so ask before anger about why them change a humans battery
Japan is doing bond yield control.
I tried but i gave up.
high quality of life (excluding severe mental health issues)
Re the dumb comment at 12:02. Japanese don't hate you because you are not Japanese. Japan hasn't fallen for th open board multicultural bullshit that we were force fed with the disastrous consequences that are destroying Western Europe, Australia and Canada in particular.
I think the issue with Japan is that "Growth" is a very subtle word that's applied very broadly. I'm reminded of the debate about Moore's Law back in the late 90's/early 00's. Single-core processors were reaching the peak of their speed and utilization and everyone was bemoaning the "Death of Moore's Law," but it was because there was a fundamental misunderstanding about what that meant. Moore's Law is a doubling of COMPUTING POWER every 18 months, NOT a doubling of SPEED. And sure enough, multi-core processing became the new norm and "revived" Moore's Law. It's kinda the same here. I do NOT believe Japan has stopped "growing." They have new cars, new tech, new EVERYTHING. What they HAVE stopped doing is EXPANDING, and that economic EXPANSION vs Stagnation and Contraction is not the same as "growth" or "degrowth," and THAT is the lesson I think Japan teaches us: Economies MUST "grow," but we must learn how to QUANTIZE "growth" WITHIN a fiscal/GDP envelope in a way that ISN'T just making it synonymous with "Expansion."
The reason their economy is stagnating is because they don’t have diversity and diversity is our greatest strength.
Japan, South Korea and Singapore are perfect examples of how ludicrous it was for industrialized nations to ever assume that an economy can stay afloat during a population crisis.
Thanks to Covid and the weak Yen ,we are seeing inflation just like anywhere else (2.5% rise yearly), for the past few years. Real Estate prices in Tokyo are skyrocketing.
I think this video is reporting about Japan in the previous decade.
Economists should have learned by now there is no end to history. Every country that stagnated or peaked or however you want to word it eventually gets overwhelmed by internal corruption, massive social unrest or both. Leaders think people are just going to accept what is given to them but that will never ever be the case. Every functioning developing nation has the same unwritten contract that all citizens are subscribed to: "We will work to our graves and in exchange our children will have better lives and I'll have dignity in old age." No leader has ever managed to keep their end of the bargain indefinitely. Sooner or later, people will realize they're giving up their lives for a false promise and someone's blood will spill.
But this kind of talk will affect stock prices so lets all pretend we're stupid for a few more years.