8 ms·

Beside the demographics, another aspect is that even with low birth rates, salaries in Japan don't seem to have much growth over the past say 20 years, and you

by xt00 5y ago

Beside the demographics, another aspect is that even with low birth rates, salaries in Japan don't seem to have much growth over the past say 20 years, and you are starting to see trends to have companies work lower hours -- which likely will see either flat GDP or potential lower GDP. Japan has been hit with a ton of competition in many big industries by their neighbors like China, South Korea, Taiwan, and others. So I don't personally have any information, but I could guess that with those prevailing forces / trends being well known in Japan, I wonder if many brands are willing to accept smaller margins to avoid passing on costs to consumers, or something similar? Would be great if anybody knew more details -- like if you produce some goods in Japan, do you see that costs are rising, but do not want to increase prices?

idiotsecant 5y ago
This is assuming that lower work hours will decrease GDP. Japan is basically the poster child for work cultures that value you sitting at your desk doing nothing useful for sometimes insane durations.
- andrekandre 5y ago
  yes, there is some idea that if people had more time off they would actually spend more, making the economy grow a bit better (among other benefits) one example: https://en.wikipedia.org/wiki/Premium_Friday https://en.wikipedia.org/wiki/Premium_Friday
- imtringued 5y ago
  Well, isn't that deflation by definition? Excess production drives prices down. People are waiting at their desk, ready to absorb any inflation shock by actually working.
frankfrankfrank 5y ago
It really does expose a reality that is both inconvenient and repressed by the ruling class, inflation is (among other things) used to defraud common people and also artificially inflate the value of the affluent's hard assets. It is precisely why the Fed pushes inflation to both eat away at the debt of the affluent, largely at the cost of institutional (pensions) investors, foreign nations, and tax payers. We are also entering, if we have not already entered a negative feedback loop where it is not only not in the interest of the affluent to suppress inflation, it is actually beneficial/profitable for them to drive inflation up … at least until the music stops.
- RC_ITR 5y ago
  IDK why everyone on HN thinks that the affluent have debt, when in fact, the bottom 50% of Americans hold less that 4% of wealth because most of them are in net debt, largely to entities owned by the affluent. Maybe it's because inflation is actually bad for the moderately affluent who made a disproportionate share of their income early in life and want to live off that nest egg while no longer working (which I assume to be overrepresented on HN).
  - foobar2021 5y ago
    The affluent are invested in companies. Maybe I’m wrong but I’m going to guess American companies have multiple orders of magnitude more debt then the bottom 50% you’re referring to; just not nearly as much relevant to their greater assets. Some percentage of each company value is linked to their ability to take cheap debt, use that for further investments/acquisitions, and have inflation mitigate the damage (directly) or risk (indirectly via bailouts). None of the above conflicts with your point about wealth but they seem like completely different metrics that aren’t inherently related.
    - human 5y ago
      What is important is how much debt you have that cost you less than inflation. Governments and wealthy individuals have tons of 2% interest (or less) debt. Inflation at 4% erodes that debt pretty fast. The poor and middleclass have debt at 10-30% and inflation at 4% is doing not much to erode it.
      - RC_ITR 5y ago
        That's not true. Regardless of the interest rate, all loans' principle is inflated at the same rate. You can argue that the poor are more likely to have their principle grow due to underpayment, but that's a separate point.
        stainforth 5y ago
trinovantes 5y ago
A flat GDP and decreasing population must mean their GDP per capital must be increasing? Would that constitute as growth?
- deleted 5y ago
  [deleted]
- lkrubner 5y ago
  This is a point that the economist Paul Krugman has made in his NYT columns.
  - toomuchtodo 5y ago
    Does he account for a productivity decline curve due to the average age rising as the population declines?
    - throw0101a 5y ago
      Not sure if it's exactly what you're asking for, but a tweet a while ago: > Dean looks at GDP per capita. But Japan's aging population means that you really want to look at GDP per working-age adult. And by that measure Japan's growth has been essentially the same as America's 2/ [FRED graphic] * https://twitter.com/paulkrugman/status/1215629376806629377 https://twitter.com/paulkrugman/status/1215629376806629377
- kgin 5y ago
  Exactly, GDP per capita is a better metric when talking about what an economic situation feels like on the ground. Absolute GDP is a very “let’s rank countries by economic power” metric.

by xt00 5y ago

idiotsecant 5y ago

This is assuming that lower work hours will decrease GDP. Japan is basically the poster child for work cultures that value you sitting at your desk doing nothing useful for sometimes insane durations.

andrekandre 5y ago
yes, there is some idea that if people had more time off they would actually spend more, making the economy grow a bit better (among other benefits) one example: https://en.wikipedia.org/wiki/Premium_Friday https://en.wikipedia.org/wiki/Premium_Friday
imtringued 5y ago
Well, isn't that deflation by definition? Excess production drives prices down. People are waiting at their desk, ready to absorb any inflation shock by actually working.

frankfrankfrank 5y ago

It really does expose a reality that is both inconvenient and repressed by the ruling class, inflation is (among other things) used to defraud common people and also artificially inflate the value of the affluent's hard assets. It is precisely why the Fed pushes inflation to both eat away at the debt of the affluent, largely at the cost of institutional (pensions) investors, foreign nations, and tax payers. We are also entering, if we have not already entered a negative feedback loop where it is not only not in the interest of the affluent to suppress inflation, it is actually beneficial/profitable for them to drive inflation up … at least until the music stops.

RC_ITR 5y ago
IDK why everyone on HN thinks that the affluent have debt, when in fact, the bottom 50% of Americans hold less that 4% of wealth because most of them are in net debt, largely to entities owned by the affluent. Maybe it's because inflation is actually bad for the moderately affluent who made a disproportionate share of their income early in life and want to live off that nest egg while no longer working (which I assume to be overrepresented on HN).
- foobar2021 5y ago
  The affluent are invested in companies. Maybe I’m wrong but I’m going to guess American companies have multiple orders of magnitude more debt then the bottom 50% you’re referring to; just not nearly as much relevant to their greater assets. Some percentage of each company value is linked to their ability to take cheap debt, use that for further investments/acquisitions, and have inflation mitigate the damage (directly) or risk (indirectly via bailouts). None of the above conflicts with your point about wealth but they seem like completely different metrics that aren’t inherently related.
  - human 5y ago
    What is important is how much debt you have that cost you less than inflation. Governments and wealthy individuals have tons of 2% interest (or less) debt. Inflation at 4% erodes that debt pretty fast. The poor and middleclass have debt at 10-30% and inflation at 4% is doing not much to erode it.
    - RC_ITR 5y ago
      That's not true. Regardless of the interest rate, all loans' principle is inflated at the same rate. You can argue that the poor are more likely to have their principle grow due to underpayment, but that's a separate point.
      - stainforth 5y ago

trinovantes 5y ago

A flat GDP and decreasing population must mean their GDP per capital must be increasing? Would that constitute as growth?

deleted 5y ago
[deleted]
lkrubner 5y ago
This is a point that the economist Paul Krugman has made in his NYT columns.
- toomuchtodo 5y ago
  Does he account for a productivity decline curve due to the average age rising as the population declines?
  - throw0101a 5y ago
    Not sure if it's exactly what you're asking for, but a tweet a while ago: > Dean looks at GDP per capita. But Japan's aging population means that you really want to look at GDP per working-age adult. And by that measure Japan's growth has been essentially the same as America's 2/ [FRED graphic] * https://twitter.com/paulkrugman/status/1215629376806629377 https://twitter.com/paulkrugman/status/1215629376806629377
kgin 5y ago
Exactly, GDP per capita is a better metric when talking about what an economic situation feels like on the ground. Absolute GDP is a very “let’s rank countries by economic power” metric.