After reading Eamonn Fingleton's op-ed piece on Japan published today in the Times, I remembered why I decided to study economics, which also led to studying demography. Fingleton turns down into up and left into right when discussing Japan's recent economic and demographic challenges, which is why his writings are more at home outside academic circles. He cites faster growth in GDP per capita in the U.S. and then suggests the measure is biased because of methodological advances because somebody said so. He doesn't mention persistent deflation.
On the population side, his single focus is on the Japanese lead in life expectancy (or mortality), which is indeed impressive. But combined with ultra-low fertility, which has already resulted in a shrinking labor force, declining mortality in Japan is a gift that presents significant macroeconomic and microeconomic challenges. Unemployment in Japan is and has always been much lower than elsewhere, except for a brief window around 2000, but participation rates at older ages are no higher. Like its macroeconomic performance, Japan's demographic profile does not inspire optimism.
