Why US economists are obsessed with ‘Japanification’ | FT

50

Economists are terrified of how slow growth, low inflation and low interest rates could hit the economy. The FT’s US economics editor Brendan Greeley explains why. Read more at https://on.ft.com/2uXZV9o

See if you get the FT for free as a student: http://ft.com/schoolsarefree or start a £1 trial: https://subs.ft.com/spa3_trial?segmentId=3d4ba81b-96bb-cef0-9ece-29efd6ef2132.

► Check out our Community tab for more stories or to suggest videos.
► Listen to our podcasts: https://www.ft.com/podcasts
► Follow us on Instagram: https://www.instagram.com/financialtimes

source

RELATED ARTICLESMORE FROM AUTHOR

50 COMMENTS

  2. High inflation in the Western countries are making the Poor people poorer & the Rich people richer .
    And you see more & more homeless people on the street . Japanification may be a good thing for the
    Poor people in general that they do not face the increasing price pressure as in the West .

  4. Japanese online public opinion, Japanese mass media, and Japanese politicians. Which one was the craziest? Frankly speaking, they were all crazy.

    When I pointed out the obvious fact in Japanese society that permanent institutions do not exist, there was no response. There was just no conversation. Non-Japanese people must be happy. They did not have to interact with such a large group of crazy people.

    But it is strange that the world's economic professionals did not express concern about the long-standing madness of Japan.

    Did they want to believe in perpetual motion too? Or was it more convenient that Japan was insane?

    At any rate, the few Japanese who remained sane were the most isolated in the world for more than a decade.

    Japan will be a little calmer until March. But come April, I think things will get crazy again. The crazy Japanese society will blame the new BOJ governor for everything.

    If the new BOJ governor implements crazy policies, commensurate with crazy public opinion, though, the inequity will disappear.

  5. At the end of the day Japan’s racism dooming any successful immigration program for Japan is costing Japan’s economy but Japanese would rather have a slow ,sinking economy than ever allow any foreigners from anywhere on planet earth to settle in Japan.

  6. yakuza operate in japan inpune transfering corporate money into pedofilic pornography. nothing is done about it. 2 busy sanctioning the russians that DONT want lgbtq in they country. vote for ukraine who want nato in ukraine to force lgbtq on russia. 

    boycott japan now until yakuza is no longer institution.

  7. Well, western countries(english speaking) have a magic wand called as skilled migration where theyjust steal smart people around the globe to pay taxes for for their aging population.

  8. yakuza operate in japan inpune transfering corporate money into pedofilic pornography. nothing is done about it. 2 busy sanctioning the russians that DONT want lgbtq in they country. vote for ukraine who want nato in ukraine to force lgbtq on russia. 

    boycott japan now until yakuza is no longer institution.

  10. China has been borrowing Japanese Yen at 0% and exchanged to USD for investment abroad for Belt and road initiative which caused lost of interest income in hundreds of billions for the US federal reserve. Japan has currency swap deal with the US and their debt ratio is at 260% of their GDP thus Japanese federal bank kept their 10 years bonds at minus 0.1 to 0% or else they can't pay their debt. Washington must stop currency swap deal with Japan to stop China and Japan must compensate Washington in hundreds of billions of interest income lost.

  11. It is bad for bank, investor and bilionaire but for normal people is just the same. Japanese citizen had slow wage increase but also low inflation, American got faster wage growth but higher inflation. If you look at top 10 richest person in the world in 1989 (height of japan economic bubble) 6 of them are japanese. Today it is American that dominate the list. If you are economist of course they think it is bad.

  15. Japanification could been rephrased as Germanification. It did not work exact since Japan is an attempted power and security check to the fast developing continent with heavier a fastest growing population and cheap to invest for the last three decades. That has changed and we are witnessing it. The cheap to invest for profit has created limitless trouble for the west

  21. Bernanke is a proven liar, repeatedly. He has no credibility or competence. “Japanification” is an euphemism for the miserable economic conditions created from failed economic policy put in action by the Keynesian disciples. A corrupt government serving economic favors to special interest groups loves Keynesian economic. Keynesian economist encourages government intervention in the monetary and fiscal policy of USA — believing The Government Hand is better than The Invisible Hand. Not surprisingly, one finds the corrupt government official, the special interest lobbyist, and the Keynesian economist all rolling together in bed.

  22. Catch 22..When there is so much conflict and insecurity going on in the world, people pull back from creating a new generation..

    There is little incentive for breeding and little inspiration to work in an unfair and unbalanced, pointless system…
    (Vibrancy has been made redundant)

  25. Alot of losers. From loser families and backgrounds complaining about their failures, only now there a chorus of them so they don't feel alone, instead of admitting they suck at life they blame everything else

  26. Capitalism tend to collapse after 300 years as evident by proto-Capitalist societies thousands of years ago.
    Capitalism already falling apart in the 21st century as evident with increasing amount of recessions in quick successions, its just a matter of time, by 2050 Capitalism will probably have degenerated into Fascism or neofeudal economies with Socialist planning taking power in most of the third world.

  29. So basically these economists are scared we can't keep doing exponential growth forever? Well yea, what the ** did you expect? Humanity can't sustain much further growth and they need to buck up and accept that.

  32. Contradiction around 2min: "when you have more demand, you have inflation".
    But everybody in school is told the opposite: "the high demand generates inflation".
    Now I think that inflation had nothing to do with anything but GREED from the market. Of they are selling much, they raise the prices as people is buying. If they're selling low, they also raise the prices, as they want to recovery the loses by charging extra from the lower number of buyers.
    If margin of profit be not controlled, we will always get ripped off.
    I know, I know, the every country who tried to control prices were bad, but they were also communists, so… How about to give a try to it in a serious, non-dictatorial country?!
    Forget. The cattle is just fine with the market (and government) hands inside their assess.

  34. So, we have 2 types of population problems.

    1) there are too many people

    But at the same time

    2) there are too few people that are working compared to those who aren't.

    Solution for #1 is to have less babies but the solution for #2 is to have more babies than the previous generation (if you wanna rule out killing old people who can no longer work).

  39. Basically Japan is ruined. Low birth rate, ageing population, high number of STDs cause of being the biggest red light district in the world. Also too many immigrants from third world countries.

  40. wouldn't the solution to widening inequality in the US be strengthening unions, worker ownership, financial regulation, etc? why would more growth be a solution if the economy has grown for decades and wages have stagnated? i think many economists have mush for brains.

  41. Japan still has the third largest economy (by GDP) in the world. And their growth rate is on par with countries like Germany and the UK. They're only interesting in how they will deal with their aging population. With currently 28% over the age of 65 and increasing to almost 40% by 2050 how do they plan on addressing labor shortages?

  43. Maybe instead of being obsessed to the situation in Japan, look at other places like South Korea and Singapore as their demographic problem is far more severe and still manage to squeeze growth. Even Japan is fine as they actually are close to their peak. They peaked too much in the mid 90s till their big fall, but after that they have been recovering just fine. They still manage to expand social safety net. Even SK which inequality is a huge problem, lately is addressing their social net to solve problems like high suicide rate, low birthrate, and stuff.

    Places like USA and even UK seems to try to solve the problem backwards. USA specially when they try to prop up the economy, it is only about helping Wall Street, crooked churches, and big corporations. It is never about helping the working and middle class.

    The eternal growth isn't sustainable if we wanna face environmental problems that could cause a collapse. These economists are trying to balance irreconcilable concepts and just winging it.

  50. These people don't even know what is going on in Japan. Japan has low growth because people are not spending money since wages are not growing. The friend of mine from Japan said if you don't have University degree your wages is very low. Japan 10 fix that problem by introducing Universal basic income and or increasing minimum wage which helps boost people's spending power

Comments are closed.