Something I’ve sporadically wondered about since the US fell into its funk and people started wondering if we would go the way of Japan is whether Japan has actually gone the way of Japan. Like consider the unemployment rate:
That’s not so bad. I sometimes think Japan may just be Texas in reverse. The Texas economy is growing sharply because people are moving there, which seems to have confused Richard Fisher into not noticing that it’s in the same severe recession as the rest of the United States. Japan’s labor force is shrinking because of low birthrates, very high life expectancy, and an unusually severe case of aversion to immigrants. Japan also clearly did have a very real recession in the 1990s after the stock market crash. But at first blush it doesn’t seem obvious that present-day Japan actually does have large quantities of idle resources. Japanese firms seem to have coordinated around expectations of sluggish growth and investment, but why wouldn’t growth be sluggish if the workforce is shrinking?