A Look at Japan's Slowdown and Its Turnaround Plan

The Japanese economy has been struggling with low growth and low inflation for several years (or even decades). These two symptoms are present in several developed economies, including the US. In this article, the authors analyze the Japanese economic experience, reviewing the headwinds and the rece...

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Bibliographic Details
Published in:Regional Economist 2014-01, p.4
Main Authors: Sánchez, Juan M, Yurdagul, Emircan
Format: Article
Language:English
Subjects:
Accounting
Aging
Economic conditions
Economic growth
Economic history
Financial services
GDP
Gross Domestic Product
Growth rate
Labor force
Population
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Summary:The Japanese economy has been struggling with low growth and low inflation for several years (or even decades). These two symptoms are present in several developed economies, including the US. In this article, the authors analyze the Japanese economic experience, reviewing the headwinds and the recent policies implemented. The economic history of Japan over the past 40 years can be divided into two subintervals: before and after 1990. In the first period, gross domestic product grew at an annual rate of about 4.5%, and the growth was persistent. This trend stopped abruptly in the 1990s, after which the economy grew at an annual rate of less than 1% until 2011. Discontinued increase in labor force participation, diminishing returns in higher education and decreasing hours all may have contributed to the slowdown of the Japanese economy during this period.
ISSN:2572-2131
1932-4707