How The Economy Of Japan Could Predict The Next Decade | Economics Explained
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Hello. I just would like to put on a critique on the way you put your rating on Japan's Growth. First, I understand your argument and I also agree on the argument of stagnant growth, but you also mentioned the Kuznets curve. Second, stagnation is also related to a developed country that has no extra margin to push its economy, just because it does not have that extra cushion from top tech transfer supplied by foreign investment.
Japan does not need that because they already on the top of tech development. Also, I would agree on giving a 5 instead of a 2.
To conclude, I think Japan should focus more on developing technology and try to offer a premium of manufactured goods (I know they already do that) or bring new goods to the markets with exclusive quirks.
I would also like to remind that companies such as Toyota are relentless on pushing forward their tech to EVs which are the "next iPhone," which is going against their philosophy of the 60s
Uh... Can you please mention which countries stuff is available in when you get sponsors dude? I can't sign up to public cos I'm not in the USA specifically. To find that out I had to GOOGLE whether it's available in Australia. It really pisses me off when I see something that seems interesting as a sponsor, go to check it out and "Oops, you're not a resident of the US... Sorry, no access for you!"
If its no problem for you guys there, can you do a review of my country (Jamaica)? Like how you do other countries on this channel (like this video)? If you cant I understand, but if you can, thank you so much
Cannot Japan just INTRODUCE LEGISLATION that mimics inlfation? Perhaps a CONSUMPTION TAX? Of approximately 2%-5% every year? Perhaps it can be divided into 4 quarters every 3 months? :D :D
Hey EE have you decided to live under a rock now?
Where's the Russia's economic impact video?
Considering Japan's culture of obsession with consistency and etiquette, it makes sense to me that they rank high in stability and confidence and also low in growth. It's like the economy reflects the society.
@nehem did you even watch the video.
Snowboarding in Japan
th-cam.com/video/4O_dRLtfW98/w-d-xo.html
He’s wrong Japan has grown. Japan’s Real GDP PPP in 1990 was $4.06 Trillion and in 2019 it was $5.30Trillion.
I see a lot of anger in this thread. I believe that it is anger, and not calm, that blinds us to the truth. I am not holder of the truth, but in my current state I am willing and able to accept your point of view if you want to argue that Japan's economy has indeed grown since the 90s. I ask you that you first let go of your anger so you can make your point in a way that is clear and reasonable.
@@americameinyourmouth9964 My friend, did you consider inflation when drawing this conclusion?
I think the difference between comparing the fear of Japan's 1980s economy overtaking the US and the fear of China's economy taking over the US today is that even if China overtakes the US's economy, it would only imply the Chinese worker is 1/4 as productive as the average American, while in the 80s, if Japan overtook the US's economy, it would imply the Japanese are twice as productive as the average American
China is slowly nationalizing its industries. Be prepared when they close their economy once again
@@secrets.295 Plus their facing their own demographic collapse, possibly even worse than what japan is facing because of their one child policy years ago. I think countries that do not have a culture of accepting immigrants will not be the top economy for any sustained period of time (unless they can somehow get a replacing birthrate).
So I think the top economies over the next decades will be Germany, USA (if political instability doesn't mess it up), and Australia. India also has a chance for a 'short' term boom because of their demographics, but their isolated cultures, military conflicts, and corrupt governments make me skeptical
Snowboarding in Japan
th-cam.com/video/4O_dRLtfW98/w-d-xo.html
Nice
Here's a vid with nice explanation of Japans Debt
th-cam.com/video/0OvlRof71Ss/w-d-xo.html
@@ryanmcfall1127 why austrailia?
I used to live in Japan and saw the end of the boom and the start of the flat lining economy. Even after the economy stopped growing, the crane count on the skyline was staggering. In a regional city, I could see something like 150 large building projects. Stagnation at a high level of consumption is not the same as stagnation at a low level of economic activity.
Yes. And even though the Japanese economy has been in "crisis" for over 30 years now, the standard of living is still very high.
Japan has economic problems most countries can only dream of.
You might be surprised to see how many construction projects are happening today! It’s actually starting to live up to that “the city skyline is always changing” persona it used to have. The amount of large scale projects is pretty staggering and surprises those of us who live here considering the state the economy is in. It’s about time it got an upgrade tho.
It might be multiple reasons for this. One could be low trust in market investments, but more trust in property. One could just be that more people are moving to cities than before (not sure if that's true though).
@@ABC-ip6jq I think more people live in cities in Japan than ever before, Japan's current problem is that rural areas are crumbling because people get out and aging population, etc.
Another is that Japanese structures have low life spans. New homes being built with current safety codes protecting against strong earthquakes and winds. Better to demolish and replace than retrofitting and that Japanese generally frown upon expensive preowned commodities.
Japan -> whatever you do inflation remains the same.
Argentina -> whatever you do inflation skyrockets.
IIRC one of the reasons that's often brought up about the Yen's stability is just how massively the Japanese have invested everywhere else in the world, making their currency much less reliant on the performance of the Japanese economy itself.
China is playing by the same book. Different way of going about it but ultimately the same end.
@@miinyoo China is Japan before its lost decades
@@miinyoo Every major Asian economy closely or loosely followed the book written by Japan on how to perform an economic miracle.
Japan's old-fashioned workplace culture is holding them back. Young people are encouraged to dedicate their lives to big corpos rather than engaging in startups. Working corporate also usually has poor life-work balance; I was at a career seminar in Osaka and their presentations even had detailed sections about how you'll be working overtime, which I think would be ridiculous in Western countries.
I always shake my head whenever I hear about the work-life balance expectations from a number of east Asian nations. Western workers would consider that tantamount to slavery in the modern market.
Every time you argue something should be a certain way in a logical way, you'll always get the "we had to go through with it back in our days, you have to do it too" answer. The customer and sempai are always right.
@@xXIronSwanXx in the future I’m sure we’ll say, “this is how we did it, you should not do that” lol…
@@solorollo9756 I'm sure we will. We are starting to see many young leaders and successful CEOs who we listen to despite being older than them (even students). Hopefully this trend continues and we stop with the old = always right narrative.
Strangely enough Japan or at least Tokyo gets high scores on a world innovation index. I wonder what new stuff they actually put out given that ossified work culture.
I feel that economic analysis should include more psychology. I feel the brief comment that Japanese people are less likely to ask for a raise is just the tip of the ice berg. We should be analyzing the psychological affects of people's cultural beliefs and attitudes towards economic activities as a key to understanding different economies.
Psychology and cultural analysis imho
I've never had "asking for a raise" in the USA work. I once asked for a 6% raise due to cost of living and my good performance, told no, and went out to get an offer for 25% more which they matched in hours. More recently I asked for 2% when one notoriously awful manager was fired and replaced, to make up for unfairly poor raises for two years and more as a gesture than a serious amount of money, and was told no and "you get paid for performance." Fine, now I'm being paid more than that to perform somewhere else.
Does anyone "ask for a raise" and get it? I only see people make more money by flexing the only power they have, the ability to walk out.
@@aluisious yeah and do you know there's this culture of not walking out and staying loyal to your company in Japan?
Imo that is one of the big failures of every economics analisis, they always just analyse the economic factors in a vacum which can lead to skewed perception
dont rock the boat would sum it up. They are very much against individuality, standing out.
Great video. I live in Japan and I love her. Most people here are not desperate, nor divided, and enjoy stable lives, which means they are happy, and so am I.
Even without continuous growth, Japan has remained among one the most developed countries in the world with the highest living standard.
He’s wrong Japan has grown. Japan’s Real GDP PPP in 1990 was $4.06 Trillion and in 2019 it was $5.30 Trillion.
@@americameinyourmouth9964 No, this is not correct.
#1) The statistic is adjusted for PPP, not for CPI. You would want GDP PPP in 1990, adjusted to a base year in CPI, and GDP PPP in 2019, adjusted to the same base year in CPI.
#2) PPP is merely a ratio between 2 currencies, there is no normalization for price change over time.
It does measure changes overtime because a country’s currency ratio adjusting its basket of goods in the past is measured annually telling you the ratio change in domestic prices compared to the US over time. The ratio of prices of the basket of goods has risen as US prices grow and Japan’s doesn’t, but its total output value still increases. This shows a rise in value of output from either the increase in the ratio of USD to Yen or a rise in aggregate production or both. Because currency ratios haven’t changed much (fluctuated) then increasing production (probably more due to export growth rather than productivity rates) is the cause.
@@americameinyourmouth9964 This is not true. Price has stagnated, but Japanese real output/production has declined significantly.
For example, the Japanese economy as a % of the world' economy has shrunk dramatically since the 80s, from ~15% of the world economy down to 4-5% of the world economy today. The US economy as a % of the world economy has remained relatively constant, at 25%. Adjusting for CPI tells you a similar story.
Had Japanese real output/production (that is, adjusted for inflation) stagnated or grown, their prices may have actually grown and experienced inflation.
@@wlee9888 why I see you two in every reply section?
Point of order: When US companies come across a large amount of Cash the CEO's first priority to find a way to increase stock prices. Sometimes that's investment in the company, sometimes it's stock buyback. Company investment is by no means guaranteed.
Sometimes it's just to announce a stock buyback (which increases the stock price), then give all the executives bonuses for doing such a great job raising the stock price, without actually doing a stock buyback.
@@ZombieApocalypse09 is that legal? What
@@blognewb apparently. Seems to happen a lot.
@@ZombieApocalypse09 The stock buy back was 1 stock
When a US company comes across a large amount of cash the CEOs first priority is finding a way to give it to himself. The fact that CEOs sit on each others BODs is incestuous and an obvious graft mechanism.
If the workforce is shrinking, and national GDP is fairly constant, doesn't that mean you're still getting growth per worker? The economy is doing better, just in relative terms, not absolute.
Not actually.....
Most of the work is getting automated.....new & improved machines rise everyday. So future generations need less workers for same amount of productivity
@@just_a_curious_thinker it doesn't sound like you're disagreeing?
@@am-zm5lz i partially agree & partially disagree
He said growth is improving per worker. But machines don't count as workers. Plus, the surplus profit due to machinery often increases salary of only top level employees, founders & investors (not of workers)
@@just_a_curious_thinker What you're describing is automation, which is a very normal way to increase overall productivity of a nation. This effectively means then that the total amount of resources to divide per person increases. And thus you are getting growth per worker. As such you're both basically just agreeing but not realizing it by looking at it from a very different angle.
That’s in relation to the constantly inflating dollar.
As you mentioned, it is unreasonable to expect infinite growth in a finite world. Japan has apparently reached that asymptote, so it seems unfair to rate them low on growth, if technically accurate.
Why? Growth isn’t resource dependent, it’s efficiency and technology dependent. There are no limits to growth other than the laws of physics, and we’re not even close.
@@TheSteinbitt It does get harder and slower the less recourses you have though, excepting breakthroughs of course. But we're also not particularly close to running out of resources so the point is moot. Other than maybe oil, I haven't read up on that particular topic.
@@joeblazer3429 the sun provides enormous amounts of energy, so there should be no problem with that. People have predicted the end of growth for decades, even Japan is growing in productivity per capita, just not as a nation because of population decline and aging.
@@TheSteinbitt Yeah but I think we also need oil and other fossil fuels for plastic production. So that could potentially be problematic.
@@joeblazer3429 hydrocarbons are easily produced from other things.
I'm Irish living in Japan for years now getting paid half of what i did back home. But the cost of living is WAY less here, i can actually save money! And i feel the economy is good even though it's not growing.
People complain about wages in Japan but that's because they're trying to live a Western life in an Eastern country. Stop trying to recreate your life in your home country and you'll stockpile money effortlessly.
@@hiimjustin8826 as if those immigrants can wrap their head around that fact
i heard Japan is a very expensive place but you saying it is cheaper than Eire?
@@manhoosnick While in most other countries prices went up, in Japan prices have been quite stable, or even lower than 30 yrs ago sometimes.
For this reason you'd now feel Japan is not very expensive.
you can buy as many potatoes as you can?
Endless growth in a world with limited resources is stupid. We should be moving away from how we measure the economy.
Exactly.
It's interesting that people still want to frame the situation as to how to sustain infinite growth rather than how to shift away from it.
Resources are limited.
Human ingenuity in working around limitations is not
@@Poctyk when economists say to use "human ingenuity" to achieve endless growth, in practice this means you won't be able to buy more things that require physical resources, but you will still be richer on paper because you can own an ape jpg valued at $1,000,000
@@Poctyk Yes, yes it is. There's a finite limit to reality regardless of how creative a person can get. Nominal value and real value are different concepts in economics, for good reason. There is a finite limit to the real value that can exist, because real value is dictated by those finite resources.
Japan has basically broken the assumptions of several laws of economics. That is why we need an entirely new 'Japanomics' to study japan.
For example, their labour laws state that companies cannot fire workers at will, and workers won't think of leaving even for low wages because of their culture, so factors of production are really immobile in Japan.
Also, the Japanese notion of loyalty is really strange, consumers feel it is their duty to keep purchasing from a company even if they raise their prices because they wanna stay loyal to one particular brand.
Yeah, Japanomics are a science of its own.
Japanese people might be the most loyal humans in the world!
And that science works till you are depressed and then take your own life
Really? That consumer part is a thing? Wow... Doesn't that go against the very nature of capitalism which Japan is a prime example of?
@@crimson6172 Yes indeed!
Japan is just amazing and having lived there for 11 years there is nothing to compare with Tokyo. The most amazing city on the planet. So many things other major cities could learn from by just seeing how its done in Tokyo.
i have been to many cities in East Asia, Tokyo is one of the most tedious and uninteresting cities , unless you like cut and paste 80's architecture with very little to differentiate between areas. It's clean, efficient, but I prefer the unkempt chaos of Taipei, Hong Kong, Shanghai, saying that it's far better than Beijing.
@@davidrenton if you want chaos come to Mumbai. Its getting better but is still rough around the edges and chaotic
@@davidrenton You're talking from a traveller's perspective, your priorities are entertainment/fun. The guy you replied to was speaking from a citizen's perspective and unless you're in your 20's, you want safety, efficiency and a clean city. Completely different perspectives.
@@mattia1026 I get your point but at the time I was living in E Asia, not Tokyo and while Tokyo would in a list get top marks in nearly every category, i.e. Transport, Safety, Cleanliness and so on, it just didn't have the vibe of say Hong Kong or Shanghai.
It's a nice, modern, clean, safe city and i did explore of the beaten path, it just seem abit repetitive
@@davidrenton Go to Chicago if you want adventure, or just any big city in US.
Something nobody ever looks at when talking about japanese population and economy shrinking is that japan went from an island inhabited by 40 million people to an island inhabited by 130 million people in under a century. At some point you reach the limits of sustainability. Just as a frame of reference, australia today has a population of 25 million. And even the worst linear demographic projections (which is already unscientific because population growth is sinusoidal and not linear) that people love to quote have japan at a population of more than 80 million in 50 years. (Which would still be double of canada and as much as current day germany).
So I think a lot of "confusion" about how the japanese economy works is due to people not checking their numbers, facts and buying into skewed projections put out there by think-tanks who want to talk up specific issues in an isolated way so they can peddle the solutions for their drummed up sideshows to gullible governments.
it's insane.
double the population of my country (canada) compressed almost into the size of the island around me. I can barely even imagine it.
It's a pretty big island. Lack of space isn't the problem here.
@@comet.x4359 Our city (Delhi's) population is almost same as your country.
その8000万人のなかの高齢者の比率が高いことが問題です。
Thanks for this. I have been reading about Japan's aging population and how it will have devastating effects on Japan. But I never knew it is so insaning overpopulated in the first place.That gives a whole different perspective to Japan aging population.
The fact that we get free documentaries on TH-cam by Economics Explained is truly a gift 👍
13:40 most TH-camrs wouldn't bother giving an explanation, thank you for going that extra mile in explaining the chart behavior, that shows professionalism
Japan should be #1 economic leaderboards. Growth in a finite world is an economic assumption, and Japan's lower growth represents their ability to balance commodity markets, and prioritize consumer well being. As you said yourself as a culture they value stability in their pricing markets and that has merit in itself.
Population,currency manipulation, overinvestment in infrastructure all have massive but limited impact on an economy.
Culture, tradition, labour laws and labour behavior are key to economic progress.
@@Outwardpd If you want a good example of politically authoritarian government look no further than Singapore. Or maybe arguably Japan too, since a single party ruled the country for dozens of years, doesn't seem very democratic. Problem with China is that their economy is largely dependent on a real estate bubble that is a big problem when it bursts. Also Xi moves into anti-capitalist direction now. And I wouldn't count on Chinese system being changed from ground up, especially since according to a study Chinese people are very collective, significantly more so than Japanese, which are I think maybe slightly more collective than Russians. There is still a lot of poverty in China and that hasn't changed much, either way we are seeing a slowing down of the Chinese growth, which is not really good news.
Before I even start watching I gotta say I am impressed with Japan. They're very limited by resources compared to other countries, which is why they wanted to expand in ww2. They've managed to create one of the most beautiful and prosperous countries in the world still. Amazing people.
At the cost of too much stress take-up for being productive. Sounds like it was worth them
Having resources doesn’t make you rich. Your people and policies make you rich. Singapore has no resources other than its people but is one of the richest per capita in the world.
@@americameinyourmouth9964 much like Dubai, its a tax heaven.
Dubai has oil and gas wealth but invests and manages it well, Afghanistan has $2 Trillion in minerals but manages it poorly.
@@nikhilprem7998 Singapore is what would happen if Southern California broke off and became its own country.
Japan's GDP per capita has been growing since the 2000s and is still growing. Thats actually more than could be said about many advanced economies like in Europe.
So far I know they're still growing in the EU as well, the financial crisis caused some issues but that's about it.
Truthfully what we're seeing and what they failed to address in this video, is the actual topic of if Japan is basically showing the future. That when populations stop growing, your overall growth rate seems way less impressive as you can now only grow on your productivity gains.
Truthfully I think the Money and Macro video on Japan is perhaps more informative on things that went on in Japan and this impacted their economy then this video was.
th-cam.com/video/pU_yyadYgG8/w-d-xo.html
Japan per Capita still below Germany, France and UK
@@widodoakrom3938 haha these European countries have also very high inflation. In simple words they are very expensive. So a difference of couple of thousand dollars doesn't make sense.🤣
@@widodoakrom3938 bruh japan has higher gdp per capita than uk
@@user-ww9hp9fo5n yes.
I love how Economics Explained covered this 9 months before anyone else on TH-cam
I'd love too see another video on Argentina and how even bad economies can get worse
Just visited and despite the poverty the streets were bustling. And it's really, really cheap. Visit!
Because Countries colonized by Spain are poor
@@zjy4466 Argentina, Uruguay and Chile are or have recently been categorized as high income economies and have very high human development index.
@@renanfelipedossantos5913 yes in economy but in political conditions are not like lack of transparency and corruption
@@renanfelipedossantos5913 hahahaha high what? Come to live here i gift you my passport if you give me yours
I would like to see a really serious video on the fear of deflation and whether or not it's actually justified. I've just heard a lot of conflicting information about how whether or not central banks fighting deflation is actually good, in either the short term or the long term.
Agreed. The natural rhythm of economies is expansion then contraction, then expansion. Seems like that was the natural rhythm of money supply before the advent of central banks - inflation during economic expansion then deflation during contraction. The "unbreakable deflationary death spiral" sounds like more Keynesian nonsense to me. Sadly, it is canon to practically every economist.
@@amerigo88 The problem with what you're saying and with some schools of economic thinking in general is that it ignores the human factor in all this. Deflation is bad for people. It is especially bad for poor people with little savings, who cannot take advantage of the lower prices but has to live with lower wages, less jobs, etc. What you're essentially saying is that the human suffering experienced during an economic contraction is not so bad. You sound so insulated from the world it's painful.
Yeah. No matter what I hear about it. I still don't get it in the long run. Shouldn't inflation be avoided more than deflation??? The whole "DEMAND DECREASES THUS fewer SALES" never made sense to me with how that connects to deflation.
@@Ansalion Mate we are talking about economics here. The second you get your eco degree you lose sympathy for the poor /s
@@MEGASTRIX in deflation "demand decrease so fewer sells" means that knowing that the pruce will go down if you wait, part of demand get deferred waiting for the lower price and so less sales.
Example if you need a new car would you buy it now or would you wait knowing that the future latest model will cost less that the current one and have more features? Some will wait, and that causes less demand so less sells.
Real estate just shouldn’t be an investment, it should be a commodity market. Ban non-individuals from owning single-family dwellings.
Well if you run for president and get elected you can do it. I doubt any niche minimally influential politician will be reading your shitty comment with no backing for its claims.
Plus, what if the owner of a mega corporation just takes out cash from his company and then buys the properties? You can't ban him from doing so, since regardless of him owning a company, he isn't one, and depriving him from rights any other citizen has won't quite help. The fact that after 30 seconds from reading your comment I destroyed it just shows how logical "power to the people" communists like you are.
@@paintyxd juden mad his Corpo friends will lose money not being able to manipulate housing prices?
@@paintyxd You are literally arguing for non state entities to artificially inflate a basic requirement of survival for pure greed. That’s no nationalistic, that’s not patriotic, and that’s not even capitalist. To regulate the market for the betterment of the nation, small business owners, and average citizen isn’t socialism and it’s not counter to capitalism. Allowing corporations to deprive workers and countrymen of affordable housing with no other means and allowing monopolies to crush all competition and innovation isn’t capitalism either. In America a single income household used to be able to afford a house, luxury goods, vehicles, and provide for the family. That was capitalism
How about the company that actually built the dwelling? It sounds good on paper but, good luck trying to ban the oldest speculative asset of the world.
Thoroughly enjoyed this video! Easy to follow and just the right amount of info to bring the point across!
It's not harder to switch salary because there are older people in the jobs.
It's just their culture to stick to one employer until they can retire/die. Some might say this has taken root because of bushido culture but the younger ones are still jumping ships everytime they got the chance especially in heavy R&D business
its not about the culture but from the regulations in many companies themselves. if you stay at one company for many years can be sure your salary will continue to rise, but if you like to change places of work then your salary is stagnant
@@adiba9734 no, people change work places for higher salaries. Unless in Japan they don't tell you your salary :D
@@adiba9734it’s exactly about the culture. In Japan, people, as you said, don’t get salary increases when switching jobs, but rather when they build seniority within a company. This is very different in the west, where the biggest salary jumps are made when switching jobs. This is nothing if not cultural
People can only be so productive. Maybe the US economy only looks like it's growing because of inflation, while the Japanese economy is showing honest figures.
Plus, I think Japan's lack of inflation has something to do with real-estate supply always meeting demand.
Are you saying that Japanese real estate doesn't go into long bubbles?
@@noneofyourbusiness4830 I looked it up and it seems the housing prices are the same as they were in 1992 other than a few minor ups and downs here and there
Very informative! Thank you for your hard work!
I'd love a video on money velocity being a key indicator of relative prosperity. Hoarding cash and assets really only helps to a point, after that the economy just isn't benefitting from stagnant funds.
By definition, any assets being hoarded are not even *part* of an economy. Economic activity by definition is the exchange of resources.
Japan’s stagnation is overstated. I’ve been going there since 2000 and the cities and economy are as bustling and advanced as any country on the globe.
Stagnation in terms of growth. In absolute levels, of course Japan is a global power with a bustling economy. But it’s not growing, and that’s what capitalism demands, infinite growth, hence the title.
Yeah, but it is "stagnating" relative to an exponential growth rate of 3% (which is literally impossible to maintain if you don't have virtual spaces with theoretically infinite resources as part of your economy.)
@@grant5642 I agree. But that’s what capitalism demands. A percentage growth, year after year, quarter after quarter. In the eyes of capitalism, Japan is stagnating.
He’s wrong Japan has grown. Japan’s GDP PPP in 1990 was $4.06 Trillion and in 2019 it was $5.30 Trillion.
@@reflectstratos9587 Yeah I mean we likely still have centuries more where we could continue seeing the growth rates of today, it just requires expanding geographically (into space), and/or technologically. Once we have better models for things maybe we'll be able to fix that aspect of our irrationality, but things could end up in a lot of ways.
This video was insightful and well made as always. Thank you!
I'm argentinian and I usually watch random YT channels while having the afternoon coffee break. Seeing my country show up so quickly in the category of "weird economies that makes no sense" makes me wonder if I should continue this coffee break or become an expat....
Wait, US companies reinvest large injections of cash into the business? What via stock buybacks? Citation needed on that one mate.
As a Japanese living in the US, I believe the biggest cause of stagnation (80%?) is their labor laws. Not even laws, actually. It is an archaic ruling from the 1970s by Japan's supreme court, that basically says companies cannot fire their employees, unless they are going out of business. Hence every layoff in Japan has to be voluntary... which of course means most desirable workers leave first. That old ruling has has caused so many problems by fueling to the immobility of workers and companies' unwillingness to hire people. The court's purpose was to let companies handle social security, which is strangely socialist. The government and industry has tried to circumnavigate the issue by hiring more "temporary" workers (who aren't really temporary but can have their contracts discontinued) which has created a very strange class system in society not based on education or wealth but rather the employment format... Weird, right? Once the companies can fire employees at will, it will boost the economy for sure. Italy made a similar transition in 2015 and since then their economic growth has sped up.
I'm not sure I understand your claim, as I understand it people are fired all the time in Japan.
@@whydoncha are they permanent employees, aka sei-sha-in 正社員 ? they can be fired for misconduct etc. but not for performance
Hi from Japan, the laws on temporary workers has relaxed recently and there's been a great push for allowing them to stay longer, bring family, and generally have a better QOL. Although, as you know, the real class system in Japan is "Japanese" and "everyone else," with the stigma against foreign temporary workers just being another part of that.
@@hiimjustin8826 Yes that will have to change soon. They need population growth.
It is actually very similar to german workforce rules!
As someone with only a freshman college level of economic knowledge I find this super interesting. Thanks for the video.
great insight as usual, you have a knack for predicting things
Oh, I've been waiting for this one
After over a decade in Tokyo, what EE says is spot on 🎯
So fascinating and amazing!
Informative. Thank you!
All of the economic "miracles" are fairly easy to explain. They were all either recovery from destructive wars, adoption of modern technology and financial systems, resource booms, or some combination of the above. Once an economy is fully saturated with up to date tech and systems it can only ever grow incrementally
The expectation of consistent growth seems absurd in hindsight. The growth is from moving from undeveloped, to developed. And once your there the only growth that can come is when the bar of what is considered "developed" gets raised by some new technology or industry.
Or if instead of making your citizens be enslaved by companies you make them expand the currently existing industries? I just have such a blast reading comments from the economical masterminds of TH-cam. Literally, why not expand current industries?
@@paintyxd "make them expand current industries" OK then Karl Marx, I'm sure everything will work much better if everyone just did whatever you say. Because command economies always work out so well.
0:38 "I'm not a monster - I'm just ahead of the curve."
That's really fascinating! Japan is a country that you could do many videos on without running out of economic content.
Can we get a video explaining the Argentina comment?
As a 24 year old in Canada, this actually sounds like a dream. Bring it on!!!
I think the world needs this.
As always great content
Thank you for this video!
Japan in many ways a fairly closed economy and as a nation like China it doesn't really have any immigration. As well as others have mentioned here for all that they embraced high tech they remained relatively old school in their approach to business in general. We will see if the new plans by the government to modernize their economy and kick off some growth will pay off or just be more of the same. Who knows? Maybe we will be able to go back to being scared of them, which as one of our closest allies it totally deserves I guess.
Great points! I'd like to bring one thing to attention. China doesn't have immigration technically, but they are forcing millions to relocate from rural areas to urban areas, essentially mimics the utility of the immigration that the US has. So china is able to prop itself up for longer due to this pseudo-immigration
China has plenty of potential for immigration, from central Asia and especially southeast Asia. Like Japan, it just needs to allow it.
@@ArawnOfAnnwn i could see china building empty cities one the mainland, filling it with immigrants, it's similar to the national economy they already have. It's a logical next step
@randomguy8196 I said central Asia and southeast Asia for precisely that reason.
@@jesseholliday3480 That would be a security risk. They're doing the exact opposite in Hong Kong, moving more Chinese in, in order to dilute unrest. They won't allow others to outnumber them in any region, for the same reason Israel prevents that.
March 2021: The US is just like Weimar Germany: Expect 100% inflation!
March 2022: The US is just like Japan: Expect 0% inflation!
Thanks again for this comprehensive Japan Economy.
Great video. Really liked it
14:16 "When American companies get a large injection of cash, the first thing they think of is 'How can this be reinvested into the business?' " Does this not conflict with the occurring increased financialisation of companies in the American market?
Just say "this statement is blatantly incorrect". It's more concise.
For a decade or so now I've been saying Economists need to examine stable economies and how to safely handle a down turn or just let it happen than balance out.
great video keep uo thhe good work
As an American expat living and working in Japan-this is one of the best explanations of Japanese economy I’ve ever heard. Good job 👍
I’ll take stability over unsustainable growth any day.
This is the best explanation of quantitative easing I’ve heard yet. Fascinating. Thank you!
Hoping that you are going to be explaining what’s happening to the economy of Russia and it’s oligarchs some time soon
Best demonstrated by Wile E. Coyote when he accidentally runs off a cliff and then freezes in mid-air before falling with that train whistle sound effect
Sick video mate
I love the informative culture of this comment section.
Hello from Japan! I am an Aussie who has been living here for 7 years. I have watched a few videos tonight about the inflation happening now in Australia and I am curious as to if this will at some point hit Japan too? What is the expected value of the yen in the future as it has plummeted recently. Will is expect a recovery? Thanks for your videos!
I am an American living in Tokyo. Yes my wage is lower here, but my monthly expense are also way lower… on top of that, my quality of life is virtually the same… if not a little bit better. Complex economy indeed. I wonder how the government is going to tackle the next couple of years… I am nervous, but I don’t see life dramatically changing.
Isnt rent in Tokyo crazy expensive for a decent place?
@@IndependenceCityMotoring yes and no. Per foot, yeah its crazy expensive. But the places are not that big. I live in a 1 bedroom apartment that costs me less than my rent did in Florida, but it is probably less than half the size.
Great explanation of how economics is a complex field of so many variables that no economic policy can have certain outcomes, only uncertain downsides to someone, somewhere.
Useful video
Great video! Thank you! I hope you make an update soon: As someone who runs a small business here in Japan, I can say that we are now seeing a rather sudden shift towards inflation: supply prices (especially from overseas) are jumping up quite steeply, and shipping costs and minimum wage requirements are also being raised. Consumers are so price conscious, and wages have been stagnant so long, that we constantly have to apologize to our customers about the increase in our prices, but they are necessary. Sundries and groceries have all gone up significantly, too, and I wonder if the burgeoning recovery from the pandemic crunch will be stalled and another "lost decade" on the horizon. Keep up the great work on these videos!
In a world with finite resources, it seems to me that this kind of stagnation, or even shrinking of the economy is inevitable for any country, and it is even desirable that it starts now and not when the petrol and gas supplies stop... It seems to me that Japan is still able to provide good living standards to all of its citizens, but I am still wondering if the capitalistic system is able to cope with that? Does anyone have any idea on the sustainability of such economy? If stability and confidence is a solid 10, then I don't understand why growth is still relevant ? It should only be if the people in the country don't all have good living standards, shouldn't it ?
I am curious about any informed opinion on this.
Other than that, great video as always
exactly. growth serves no purpose for a country that has already won. Japan has the longest life expectancy and the people have a very high quality of life. The purpose of other countries "growing" is to catch up to Japan.
Economic theory always starts with the assumption of finite resources being distributed. In addition, it assumes that all trades that happen are of equal value. So, we start with a limited value, and all economic activity is a net 0 exchange. This means, in no uncertain terms, that any growth that happens indicates loss somewhere else. Perceptive people may notice that net 0 change on a macro scale is what stagnation means in economic terms. So, Japan is just experiencing the logical result of two basic assumptions that economic theory makes. It's a rare example of capitalist society functioning according to economic principles.
@@dontmisunderstand6041 thank you. Does it also have to do with cultural thinking? (lets do things in a way thats comfortable for us, a slow moving train) I had a Japanese flatmate who`s dad got rich in the 80`s then committed suicide at the fall of it, he said "so many Japanese today are more proud of the little car then the flashy car, the simple life versus the rich life, we learnt from that"... he himself doesn`t work but lives off inheritance although meager. He`s a hikikkommori, (cant spell) just stays at home.
@@dontmisunderstand6041 Is there something that always increases (or always decreases) in economic theory ? (like entropy in thermodynamics, which always increases)
@@dontmisunderstand6041 Orthodox economic theory treates resources as finite, but if "new" resources are discovered/created these are added to the markets only considering monetary, and no biophysical consequences. That´s the reason that environmental problems (such as resource depletion and pollution) are treated in economics as "externalities". Some economists still think that the ecological critique of economy is related to an eventual absolute depletion of resources (which is not), but as the current evidence shows that economic growth is indeed material and energy dependent (even in post-industrial countries relative decoupling has been observed in very limited timeframes), our resource use - pollution generation is still growing and that is the limit we should be concerned with.
Have you done any videos on economies in central america? I would love to hear your take on places like Panama, Honduras, El Salvador (I think you did), Guatemala, etc. There’s such interesting histories and bottlenecks to growth… I would love a deep dive into this region 🤩
You did an amazing job explains this. Subscribing!
I would love to hear your explanation on Baltic region after detaching itself from USSR in the 90s and how it managed not to collapse over time
I'm japanese and was born just right when this ''lost 3 decades'' had started.
It is true that income and prices are still remaining at same level since then.
It doesn't mean we are sustaining it but just declining. Japan is just consuming its legacy to keep itself.
People does't realize this fact easily because japan isn't under war nor on serious recession.
I love this country but can't help myself from feeling hopelessness about future of this country.
Hopeless about what may i know? I am from Argentina.. you know, the other country named in the phrase “the world has 4 types of economies”.. because here we have a forever inflation since i can remember and i am 30. The last 3 years at least, inflation got to 1000% and 1 dollar that cost 1 argentina peso in 2001, now is 200 Argentina pesos. A minimum salary is at 200usd and the prices are not dar away from developed countries. Since we do not have industries. So i am soo confused when japanese people complain… what is bad there? I lived in south korea and when they complained i could only think how easy they have it. I would be rich in korea. I believe japan is similar..
@@solfh I understand your point. I know it is actually blessed to be born in japan compared to many other countries. But there is big possibility that japan will experience something similar to what argentina had been through in past. Saying hopeless is too much but i am just sad seeing my country falling
@@solfh I’d say the simplistic answer is what is relative. One might say that you shouldn’t be complaining because you’re not in an undeveloped part of Burundi (apparently ranked the poorest country in the world), but then that wouldn’t be fair to you, as while it is better than being there, that doesn’t mean things aren’t necessarily good in Argentina. Basically the gist is just because somebody else has it worse (or better) than you doesn’t mean your complaints aren’t valid.
@@einzelganger09 You know, it is still better to be born in Japan and live a sufficient live of stagnant developed economy looking how government trying to cease the aftermath of the inevitable crash, then surviving in undeveloped country only then to be killed in a war waged by your oligarchy government when their policy is failed and they need to do something to stay in power?
I cann't believe that somebody actually think that the crash of developed country is even comparable to the crash of undeveloped one. What will Japan experience in the worst case scenario? They will reduce their annual production of Toyotas from 1 mil to 500 hundred thousands, oh yeah that a neat thing, especially looking that their population will decrease in the future? Every citizen of their country couldn't afford a brand new Prius anymore? They will be forced to drive a twenty years old cars? They won't be able to afford new iphone every year? They will have like 50% unemployment rate?
Dude you are such a first world citizen, crash of Japan, even if it will happen, it will never be comparable to what any of developing or undeveloped countries people are suffering on a daily basis.
@@yousaywhatnow2195 Compare Argentina from Burundi is not good example .In this modern era of desire everyone copmplain everyone .
Great video
appreciate this
Don’t know about you, but prices and cost of living have only ever been going up in western countries. They will force growth on paper even if it declines quality of life.
If you’ve studied economics so deeply you should already know this, the rest of the world will not be anything like Japan.
I‘m interested in hearing why you think that won‘t be the case
how is that not like japan? do you know how much anything we take for granted in the US costs there?
@@hieubuiminh4739 the central banks can ALWAYS produce inflation and push up CPI. For as long as they have control of monetary supply this will be the case.
Quantitate easing has been proven to not have a massive effect on CPI, this is the method Japan prefers. You don’t see Japan behaving like USA and handing out mass stimulus money and giving -6% interest rates on mortgages after adjusting for inflation. Any western nation that endorses Keynesian economics will keep having big fluctuations between inflation and deflation, but inflation will keep winning out over the long term because this is their preferred way of transferring money from the poor to the rich and pushing economic growth. it’s more politically friendly, they can change the way they measure CPI and hide it to a degree(like they are already are)
Yeah cause there is no other choice. But Usa won't have it as hard cause their population will keep growing until 2100
Snowboarding in Japan
th-cam.com/video/4O_dRLtfW98/w-d-xo.html
Would be great to see you make a video on the Russian sanctions. Especially the central bank sanctions. Like, that would be nuts.
Fascinating
Could you do a video like this in a short series about the Nordic Countries (Denmark, Sweden, Norway, & Iceland)? I would love that.
Well, giving japan such a high rank despite all these weakness make me thinks that there is something missing in the ranking.
Would have liked to have heard you spend more time on the second question about realistic/unrealistic expectations of limitless growth. Otherwise, this is still a useful video
Good content
Nice job
A couple of things:
1. Japan relies on the US for security. Therefore, it had very little choice but to accept the Plaza Accord.
2. Japan eased through the rise of China and other tigers, which means the supply side was masking inflation. Now that all these dragons and tigers got rich, it's not clear that there are replacements for them. Supply is tightening up at the worst time.
I think these models and assumptions vastly underestimate the changes in society since around 2004, particularly the rapidly rising income inequality which will soon pose completely new challenges
8:31 this is basically modern day Netherlands but prices go up.
Thanks for your videos. Its clear to see, When the government needs money, It CAN simply print it out. When the worker needs money, We need to work harder and spend more money.
Does this take "peak everything" approaching in the 2030s and 2040s into consideration and how most economies will need to prepare for that or crash?
Crash will happen in 2029. Recession in the US always occurs every 50 years. 1879, 1929, 1979. Its probably 2029 with new economic reforms driving growth after the crash. Usually everytime a crash occurs new technology was developed en mass. The 1930s saw huge increase of automobile & aerospace manufacturing, the 1980s computers became widely available, come 2030s my prediction is Robots and AI will be the new IT thing. Also prior to a big crash people always suffers from social problems. The 1920s was the inequality issues, the 70s was the hippy movement, the 2020s racial and capitalism/socialism issues. It will all peak then slowly goes down. Our economy are obviously planned by a bunch of elites. Its just too good to be true to say that all of this are just coincidences.
@@secrets.295 What about 2008/9 crash
@@secrets.295 the social problem before every crash got progressively worse before every crash. they never truly fixed the problems of why the stock market crashed after the great depression. i mean they did, but wealthy individuals lobbied to roll back regulations because it would "help the economy". and after every crash the social problem got worse. the rich got richer and the poor got taxed
@@secrets.295 There was no recession in the US in 1979. There were one or two recessions in the early 1980s (depending on whether you considering it one "W" shaped recession or two separate recessions). Also, the late 1970s was the Disco Era. The Hippie Era was the late 1960s.
Who could have assumed that when you massively shrink the big spender part of demografics and massively increase the low spender one ( 20 somethings spend way more than retirees) while you are a massive importer in a world with ever increasing energy costs you would get economic stagnation.
Surprised I didn’t hear about the IMF’s (aka the USA) soft coercion to force Japan to agree to Plaza accords.
Nice, very interesting.
Man, the growth sector really neutered Japan on the ranking board, it was so close to toppling Ireland.
👆🏾Heyyyyy text for your proper mentorship and tips for business,
The leaderboard is nonsense, anyway.
Irelands' place atop that leaderboard makes little sense anyway.
I don't really get roughly neutral growth being scored a 2. What's a slight negative growth? Moderate? Severe? Collapse? vs. 3-10 are all metrics of positive growth
@@iPlayOnSpica Also, the size of the economy is a stupid thing to rate. GDP per Capita makes way more sense.
If the greatest economists in the world are baffled by how the economy of Japan behaves, then how can we possibly trust them to centrally plan our economy?
Then how can we trust them to do anything?
Exactly
I wouldn't trust them to write a school essay given the impressive amount of garbage they take in and regurgitate.
On point 😂
We don't and central planning is bad. Even if Milton Friedman revives and proposes to take handle of things it would be better to refuse that offer.
Hey I loved this video.
Also a suggestion - if you get some time can you please make a video about the Russian ruble after the invasion and the impact of the currency's devaluation on the world economy.
Really enjoying reading the perspectives in the comments. Japan has a lot of unique "normals" which we can only find from outside... and nowadays we often finds itself so behind and questions why, but maybe it is the measurement and the standard that are foreign to Japan, or just so American.
Definitely demographics plays a lot too.
Seems like Japan is prime example on how culture affect the economy. they learn from 90's mistakes and don't let the economy get too hot ever again.
I expect to hear about each country's quirks and features.
The Doug DeMuro of economics, right?
this video is trippy I've been to all the places shown
it even showed my old school which is just on a random street
Great 👍