• Home
  • About us
  • Contact Us
  • Date/Time
  • Login
  • Subscribe

logo

  • Home
  • Politics
  • Economics & Finance
  • World
  • Arts & Books
  • Life
  • Science
  • Philosophy
  • Subscribe
  • Events
Home
  • Home
  • Blogs
  • Politics
  • Economics & Finance
  • World
  • Arts & Books
  • Life
  • Science
  • Philosophy
  • Subscribe
  • Events
  • Home

George Magnus

Insights into the global economy

Turning Japanese—again

An interesting economic experiment is underway in Japan—and its results will hold lessons for the rest of us

by George Magnus / August 8, 2016 / Leave a comment
  • Facebook
  • Twitter
  • Linkedin
  • Email
A man looks at an electronic stock board of a securities firm in Tokyo, Monday, Aug. 8, 2016 ©Koji Sasahara/AP/Press Association Images

A man looks at an electronic stock board of a securities firm in Tokyo, 8th August 2016 ©Koji Sasahara/AP/Press Association Images

After the financial crisis in 2007/08, a barrage of research reports featured the headline “Turning Japanese,” invoking The Vapors’ 1980 hit song. What the authors meant was that Western countries looked as though they would follow the Japanese experience—following the bust of that country’s massive credit and financial bubble in the 1990s—of a banking crisis, escalating public debt, deflation and a lost decade of economic growth—or over two in Japan’s case. With Western countries also confronting the rapid ageing of society that Japan experienced rather earlier, the comparison hasn’t proven off the mark. But we might well be turning Japanese again in different ways, because of Japan’s latest response to its economic predicament.

Last week, the government, lead by Prime Minister Shinzo Abe, attempted to breathe new life into the economic programme that bears his name, Abenomics. Abe’s programme revolves around the so-called three arrows of fiscal stimulus, monetary largesse and structural economic reforms. Many people have criticised Abenomics for having failed to deliver a sustained rise in economic growth and two per cent inflation, both of which suffered a relapse in 2015, with increases of just 0.5 per cent and 0.3 per cent, respectively. There’s no way that these setbacks can be brushed aside, but neither can Abenomics. Remember that Abe was only elected in 2012.

Japan is a rich country, with an income per head of over over $32,000, and there is little in the way of social tension in the country. Yet its economic confidence is low, its population is shrinking and ageing rapidly, and the economy remains constrained by political blockages to opening up rigidities in the labour market and in service industries. Total population is falling by almost one per cent per annum, and the old age dependency ratio, that is the number of over 65 year-olds per 100 working age people (15-64 year olds) is already 43.3 and expected to rise to 63.8 by 2040. Put another way, there are now 2.3 workers to support each pensioner, but by 2040, there will only be 1.5.

Under Abenomics, the government has succeeded in…

YOU’VE HIT THE LIMIT

You have now reached your limit of 3 free articles in the last 30 days.
But don’t worry! You can get another 7 articles absolutely free, simply by entering your email address in the box below.

When you register we’ll also send you a free e-book—Writing with punch—which includes some of the finest writing from our archive of 22 years. And we’ll also send you a weekly newsletter with the best new ideas in politics and philosophy of culture, which you can of course unsubscribe from at any time







Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information.

Click to learn more about these interests and how we use your data. You will be able to object to this processing on the next page and in all our communications.

9394113695df45ddae15883.79030767

Go to comments

Related articles

Japanification: the economic spectre haunting Europe
Paul Wallace / August 16, 2019
The eurozone is showing the perturbing symptoms first diagnosed in Japan, but ever-looser...
Austerity: it came, conquered then disappeared—without any argument
Tom Clark / July 16, 2019
Tory candidates are on a spending spree, but austerity has not been defeated. There is...
Share with friends
  • Facebook
  • Twitter
  • Linkedin
  • Email

Comments

No comments yet

Prospect's free newsletter

The big ideas that are shaping our world—straight to your inbox. PLUS a free e-book and 7 articles of your choosing on the Prospect website.

Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information. Click here to learn more about these purposes and how we use your data. You will be able to opt-out of further contact on the next page and in all our communications.

This Month's Magazine

Perspiciatis unde omnis iste natus.

A pint with Mr Wetherspoon, the wisdom of Clive James, inside the new arms race. Plus: A short story by Kamila Shamsie, and the new ideas for 2020

Subscribe

Most Popular

  • Read
  • Commented

Six reasons why the Left need not despair

What was the general election turnout? (And four other statistics to know)

How did the Conservatives win?

The sinister threat to human rights buried in the Conservative manifesto

Ivan Rogers on "nonsense" predictions and why Johnson will not pivot to a softer Brexit

Boris Johnson unbound: A British tragedy?

3 Comments

Ivan Rogers on Brexit: the worst is yet to come

3 Comments

John le Carré's post-Cold War vision is shot through with a sense of longing

2 Comments

How dare those signed up to hard Brexit lecture Labour on the economy?

2 Comments

Could this psychological theory explain why we’ll never let Brexit go?

1 Comments

About this author

George Magnus
George Magnus is a well known economist and former Chief Economist at UBS. His forthcoming book is "Red Flags: Why Xi's China Is in Jeopardy" (Yale University Press)
  • Follow George on:
  • Twitter
More by this author

More by George Magnus

The new north American trade deal contains a lesson for Brexit Britain
October 8, 2018
Of course it was right to rescue the banks
October 2, 2018
Ten years since the Lehman collapse, remember how it all unravelled?
September 10, 2018

Next Prospect events

  • Details

    Prospect Book Club - David Lammy

    London, 2020-03-19

  • Details

    Prospect Book Club - Jack Shenker

    2020-02-17

  • Details

    Prospect Book Club - Amelia Gentleman

    2020-01-27

See more events

Sponsored features

  • Delivering the UK's invisible infrastructure project

  • Future of Aid: the full report

  • A forest fund for the future

  • A new humanitarianism for the modern age

  • The future of sustainable economic development

PrimeTime

The magazine is owned and supported by the Resolution Group, as part of its not-for-profit, public interest activities.

Follow us
  • Facebook
  • Twitter
  • Google+
  • RSS

Editorial

Editor: Tom Clark
Deputy Editor: Steve Bloomfield
Managing Editor (Arts & Books): Sameer Rahim
Head of Digital: Stephanie Boland
Digital Assistant: Rebecca Liu
Production Editor & Designer: Chris Tilbury
Commissioning Editor: Alex Dean
Creative Director: Mike Turner
US Writer-at-Large: Sam Tanenhaus

Commercial

Commercial Director: Alex Stevenson
Head of Marketing: Paul Mortimer
Marketing and Circulation Executive: Susan Acan
Head of Events: Victoria Jackson
Events Project Manager: Nadine Prospere
Head of Advertising Sales: Adam Kinlan 020 3372 2934
Senior Account Manager: Patrick Lappin 020 3372 2931
Head of Finance and Resources: David de Lange

  • Home
  • Advertising
  • Contact Us
  • Privacy Policy
  • Terms and Conditions
  • Acceptable Use Policy
© Prospect Publishing Limited
×
Login
Login with your subscriber account:
You need a valid subscription to login.
I am
Remember Me


Forgotten password?

Or enter with social networking:
Login to post comments using social media accounts.
  • With Twitter
  • Connect
  • With Google +
×
Register Now

Register today and access any 7 articles on the Prospect’s website for FREE in the next 30 days..
PLUS find out about the big ideas that will shape our world—with Prospect’s FREE newsletter sent to your inbox. We'll even send you our e-book—Writing with punch—with some of the finest writing from the Prospect archive, at no extra cost!

Not Now, Thanks

Prospect may process your personal information for our legitimate business purposes, to provide you with our newsletter, subscription offers and other relevant information.

Click to learn more about these interests and how we use your data. You will be able to object to this processing on the next page and in all our communications.

×
You’ve got full access!

It looks like you are a Prospect subscriber.

Prospect subscribers have full access to all the great content on our website, including our entire archive.

If you do not know your login details, simply close this pop-up and click 'Login' on the black bar at the top of the screen, then click 'Forgotten password?', enter your email address and press 'Submit'. Your password will then be emailed to you.

Thank you for your support of Prospect and we hope that you enjoy everything the site has to offer.

This site uses cookies to improve the user experience. By using this site, you agree that we can set and use these cookies. For more details on the cookies we use and how to manage them, see our Privacy and Cookie Policy.