Tuesday, February 20, 2007

More on Japan's demographic crisis

Alpha-Sources has a good discussion of the subject here...the primary idea being that just getting Japanese workers to work until they are much older than traditional retirement age is not going to be enough to generate enough GDP to pay the country's bills.

The fact that the country's total population is beginning to shrink means that shrinkage of GDP is almost inevitable...as Japan cannot continue to increase its exports indefinitely. At some point increased domestic consumption is necessary to generate GDP growth and that is difficult with a shrinking population.

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