Actually, there's a very good explanation for how net exports can increase substantially even though official GDP measures decrease; it represents less than 5%

Actually, there's a very good explanation for how net exports can increase substantially even though official GDP measures decrease; it represents less than 5% of the japanese economy. Japan's GDP is about $4T right now. Net exports have increased to 200B. Which is, by the author's estimation "a lot". Japan has had an export policy for the past 30 years. The fact that it's managed to create 4 GDP points worth of net exports in the past 20 years is not exactly a ringing endorsement. What's happened in Japan is that net exports have become a somewhat larger component of a not-rising-very-quickly GDP. Part of that is because exports have increased. But mostly it's because imports have increased more slowly than exports [remember, we're talking net here]. Here are some contextual data points for you: Incomes in Japan have decreased in nominal [yen] terms. http://research.stlouisfed.org/fred2/series/JPNCOMPQDSNAQ?cid=32281 http://research.stlouisfed.org/fred2/series/JPNCOMPQDSNAQ?ci... Domestic Consumption has basically not moved since 1995: http://research.stlouisfed.org/fred2/series/JPNPFCEADSMEI?cid=32281 http://research.stlouisfed.org/fred2/series/JPNPFCEADSMEI?ci... Manufacturing has basically not changed since 1990 http://research.stlouisfed.org/fred2/series/JPNOTPT?cid=32281 http://research.stlouisfed.org/fred2/series/JPNOTPT?cid=3228... Exports didn't do much for the first "lost decade", but then exploded in the 2000s , then crashed nighmarishly, then picked up again in the last 2 years. http://research.stlouisfed.org/fred2/series/JPNEXPORTQDSNAQ?cid=32281 http://research.stlouisfed.org/fred2/series/JPNEXPORTQDSNAQ?... The government has run deficits up from 50% of GDP in 1990 to 220% (!) today, which some might say is questionably sustainable http://research.stlouisfed.org/fred2/series/GGGDTAJPA188N?cid=32281 http://research.stlouisfed.org/fred2/series/GGGDTAJPA188N?ci... Fewer people work: http://research.stlouisfed.org/fred2/series/JPNLFPRNA?cid=32281 http://research.stlouisfed.org/fred2/series/JPNLFPRNA?cid=32... And finally, the way that you know things aren't "quite right" is that the currency has been deflating since 1995. http://research.stlouisfed.org/fred2/series/JPNGDPDEFQISMEI?cid=32281 http://research.stlouisfed.org/fred2/series/JPNGDPDEFQISMEI?... That, among other things, is what led to the stronger yen, which is actually something that constrains japan's net exports, not helps it. On a more general note, you can't go to tokyo and say "ooh, look at all the shops, the economy must be doing great" any more than you can go to 5th avenue in new york and say, "wow, tiffany's is full of people, the US economy is gangbusters!" Making that argument is just really, really stupid.