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Japan is a very rigid economy where doing things a bureaucratic, traditional way is prized and new innovations are difficult and slow. They have low immigration
by seibelj 5y ago
Japan is a very rigid economy where doing things a bureaucratic, traditional way is prized and new innovations are difficult and slow. They have low immigration and culturally non-Japanese cannot assimilate fully. Their birth rate is low, they can't replace population with immigrants, and an ever increasing percentage of those who are alive are old, no longer productive / contributing to the economy, and spending money on end-of-life things in retirement.
No matter how much money they print, it can't solve for an economy where there are fewer consumers and producers every year.
- jbay808 5y agoI think the Bank of Japan might be more innovative than you give them credit for, seeing as how they were the first to deploy almost all of today's unconventional policies, including QE itself. A low birth rate also is certainly not some immutable characteristic of Japanese culture; they had very high birth rates through most of the 20th century. It's clearly the result of economic circumstances and incentives, like the high cost of childcare and long working hours. These do seem like things that government and monetary policy cannot control directly but can certainly influence. In some respect the low birth rate might be both a cause of deflation itself and also a result. Lastly, > No matter how much money they print, it can't solve for an economy where there are fewer consumers and producers every year. It might not solve the economy, but speaking strictly of inflation, it doesn't seem imaginable that no matter how much money they print it won't create inflation. They must just be printing the wrong kind of money. (As this economist explains, there are indeed different kinds: https://youtu.be/4xgHbW2A9KE https://youtu.be/4xgHbW2A9KE )