Paul Krugman on Japanese demography

Paul Krugman, a Nobel Prize-winning economist and New York Times columnist, has just published an astute article on the reasons behind Japan’s long-term economic slump. In short, it’s largely down to demographics:

When you look at Japan’s declining share of world GDP, and even its relative decline in per capita GDP, the biggest single cause is the declining number of working-age Japanese.

The Japanese government is gradually increasing the retirement age from sixty to sixty five. Germany, whose demographics are similar to Japan’s (a low birth rate and a greying population), has gone one step further: it recently raised the retirement age from sixty five to sixty seven.

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2 Comments

  1. I wonder what happens for the poor fifty-nine-year-olds looking forward to retirement next year, but then they go and change the retirement age to sixty-five! :) ~

  2. I hadn’t seen this article – thanks very much to posting it. My wife, who’s Japanese, is pretty pessimistic about the future of the Japanese economy. From demographics to reluctance to change old ways, it’s getting tougher and tougher for them. I’ll pass this on to her.



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