A Shrinking Society: Post-Demographic Transition in Japan

China’s Looming Crisis: A Shrinking Population
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The growth rate of the economy needs to be assessed differently for countries with growing populations that need to create jobs, like India.

You’ve analyzed the effects of longevity on savings.

Japan has experienced anaemic economic growth since the early s when the asset bubble burst. Yet Japanese people remain rich, live very long lives — contributing to the large proportion of elderly — and Japan is safe, clean, comfortable and modern. There is no sense of crisis among the Japanese people and no feeling of urgency driving drastic changes. The preoccupation with growing the aggregate economy and, for Abe, returning Japan to some form of pre-war glory, appears a strange distraction.

The Abenomics policy package to revive the economy is palpably failing. The other two arrows of Abenomics — flexible fiscal policy with medium-term fiscal consolidation, and structural reform — have dangerously misfired.

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Government spending has not slowed and the second consumption tax hike, from 8 to 10 per cent, has been delayed from to The plan to achieve primary surpluses — with government spending less than revenue ignoring interest payments on debt — by has been pushed back. Gross government debt is an unprecedented per cent of GDP and continues to grow. This is crude Keynesian spending without a plan. The most important of the policy package is structural reform, and on that front there has been even less action.

Supply-side, or productivity-enhancing, reforms require breaking through vested interests where they hold back productivity growth and allowing resources to be deployed where they are most productive.

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This is the book to focus on a new phenomenon emerging in the twenty-first century: the rapidly aging and decreasing population of a well-developed country . By Toshihiko Hara. Springer, Shrinking and ageing population is a new phenomenon emerging in the twenty-first century. Many well-developed countries.

It is a drag on the economy. Less well known but more important is that the services sector is also protected from competition internationally and domestically. Foreign firms cannot and do not compete in many sectors in Japan. In fact, at less than 3 per cent, the stock of foreign direct investment in Japan as a proportion to the size of the economy is the lowest in the OECD, lower even than it is estimated to be in North Korea.

But the prize of agricultural reform remains largely undelivered. With its shrinking and ageing population, Japan will need productivity growth to maintain living standards. Printing more money alone is not sustainable. Each worker has to become more productive as the shrinking labour force has to support a larger proportion of the population. They will more likely be able to do that if Japan opens up further to foreign capital, technology and workers.

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We can already see signs of this in the number of care workers from Indonesia and the Philippines who are employed in Japan. Humanities, Social Sciences and Law Browse shelf. Population growth is typically very slow in this stage, because the society is constrained by the available food supply; therefore, unless the society develops new technologies to increase food production e. In stage 1, pre-industrial society, death rates and birth rates are high and roughly in balance, and population growth is typically very slow and constrained by the available food supply. Countries may also choose to undertake mitigation measures to reduce population growth. There is also evidence that societies where young people cohabitate — either before marriage or before they have children — tend to have higher fertility rates. For example, many of Japan's universities are facing bankruptcy because of the lack of students.

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Demographic transition

Source: U. Census International Data Base. Fertility rate. Births per woman. Sources: World Bank; U. Number of newborn babies. Projection under one-child policy. Second child. First child.

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Fertility rate by country Replacement level fertility.