Japan: The Fading Economy
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- Опубліковано 21 сер 2019
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Japan became the first of the modern Asian countries to experience massive sustained economic growth. Japan had a lot going for it after the end of the war, it was able to rebuild with the help of the allies and go through its own modern industrial revolution. In the 1960s, Japan was growing at a rate of 10% a year which for a national economy was unheard of at the time, this economic growth continued and japan was able to ride the wave of globalization as the world's low-cost manufacturer. Japan developed a huge car industry, it was at the forefront of consumer electronics and was working meticulously to make sure that this newfound wealth was being invested wisely into infrastructure like high-speed rail, airports and metro systems that would make their economy even more efficient.
At its peak, there was so much wealth in japan that the real estate market of Tokyo had some pretty crazy anomalies. In the late 80’s it was estimated that the imperial palace covering an area of 3.4 square kilometers in central Tokyo had a real estate land value greater than all of the real estate in California. Of course, the imperial palace was never for sale and this was based on the cost per square feet in the area but it still should give a good idea of just how much money was washing around in Japan.
In this video, we will look at how this all went so wrong and what it can tell us about countries that are today where japan was 40 years ago.
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📚 Want to learn more about Japan? We recommend reading "The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80s and the Dramatic Bust of the '90s", by Christopher Wood 👉 amzn.to/2UqaQlQ (as an Amazon Associate, we earn from qualifying purchases)
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Sources & Citations -
Hutchison, M.M., Westermann, F. and Fuest, C. eds., 2006. Japan's great stagnation: financial and monetary policy lessons for advanced economies. Mit Press.
Lockwood, W.W., 2015. Economic development of Japan (Vol. 2161). Princeton University Press.
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u give the west too much credit for japan's revival.
Japan was already a modern industrial economy. that's why it was able to fight in ww1 and ww2 as an equal to western nations.
it was more industrialised than Italy for instance.
they just rebuilt what they US destroyed. As they already had done it once before.
also japan's land value of imperial Palace was a asset bubble.
USA made japan appreciate its currency to the dollar on the foreign exchange markets, as part of the plaza accord in the 80s. to protext usa industries and currency.
since you know japan is militarily occupied by them.
japan had to do this by removing a ridiculous amount of yens from the foreign export led business model markets.
these sudden influx of yens that were removed from the foreign trade market, had nowhere to be dumped other other than in domestic real estate.
it created a massive property bubble as companies, banks, individuals sought to buy real estate to protect their money from devaluation.
which then directly collapsed japan's economy, leading to the lost (3) decades.
and they have been stuck in this stagflation since the plaza accords. as USA won't allow them to control their own currency.
which Germany and China can.
I used to like you. But now you're too USA/Western biased. Didn't even mention 80s trade war. Disappointed!
They should try to increase their immigration rates, this can help their labor force to grow and their birth rates to follow up, giving exactly what this economic needs.
We
I'm an Aussie who was traveling in Japan 3 years ago. On their news they acknowledged a very profound fact. "In japan we sell more adult diapers than infant diapers."
How long do you want to live? Will your bladder keep up with your plan? i.e. The amount of time you need diapers as a baby is pretty fixed, but if you have really long lifespans like Japan you can easily need them for decades on the other end.
@@CartersvilleFan Japan is one of the few countries that doesn't need to increase their birth rate to counter depopulation, because they could allow more immigrants instead.
Immigration should be carefully controlled, so that only the right kind of people enter the country, but Japan has historically been racist and bigoted against foreigners which needs to change.
Allowing appropriately qualified, Vietnamese, Thai and Filipino workers to enter the country would be a step in the right direction.
@@GonzoTehGreat How is immigration for Japan? Is it really restricted?
@@kmmediafactory Japan has very strict immigration laws.
@@CartersvilleFan I always wondered why. Could it also be the same reason as the US when it comes to the men? Women's standards are too high? Or...
Economics is just like physics. The moment you see "infinite" numbers you know something is wrong.
Economists envy physicists. Physicists have 3 models which together explain 99% of their observations. Economists have 99 models which together explain 3% of their observations.
@@SpectrumDT this is the most accurate thing I've ever seen in the youtube comments.
You should listen to Milton Friedman zero sum
@@SpectrumDT Haha
Big brains 👏
Japan, where life quality is so good, it’s actually bad.
Suffering from success
@@forsagebone it's not even a meme now, they are actually suffering from too much success...
Accurate
ahhhh
In life, you gotta struggle and have problems, otherwise it's boring and frustrating
Gotta love "japan" always being represented on film with the exact same crossing in shibuya from 10000 different angles.
By now I'm starting to recognize some of the people in the crowd : D
The Japanese time's square lol
Just like how they add a yellow filter when showing India, Mexico or any 3rd world country.
@@lexprontera8325 really?
@@augmento8584 No. It's a joke.
Japan's government : Spend your money
People : *no*
Government : >:O
@@jaywardhanraghu4822 People:
.
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の
@@Kreesty はい。。。。の
Japan's Government: Have Babies ,our nation is literally dieing from getting old.
Japanese people: No
All those Godzilla attacks taking its toll now.
Doritos
The Broken Skyscraper Fallacy in action.
@@Nietabs yum
Based on this video i would say an actual godizilla attack would helo Japan's economy.
Destroying evrything does get people to spend their money, right?
@@azekia You mean it's time to bring in Hello Kitty my fellow comrade?
I live in South Korea, and as much as we don't like to admit it, I think our economy is slowly following the steps of Japan. It's like nobody wants to spend anything and we all just try to buy up as much land in the capital or large cities as we can. I really hope we don't have our own lost decade. Good greetings to everybody.
Well, currently korean birth's rate are the lowest right? And so many young generation can't afford to buy property in the metropolitan area
What an economy will look like if the government does not safeguard the future of the future generation。 Not making sure that the younger generation have good opportunities, good economic and social environment to have children. Greeting from Hong Kong.
This is also beginning to happen in China. Their census showed that the country was more industrialized and suburban, with more people moving to the wealthy Eastern cities, but the birth rate began to decline and the aging population grew. I feel that as a country becomes more developed, it falls into the same trap.
Interestingly, the US is the one country that has not fallen into this paradox due to immigration. There are millions of immigrants flooding the US to replace the aging workforce, meaning that it was able to sustain itself.
I think if a country wants to survive the future, it either needs an influx of immigrants or a way to make being a developed country less stressful
@@intreoo I guess you may not realise there is a cultural factor making it worse in east asia. It is way more stressful to raise a child in East asia for the emphasis in education comptition, and also the lower level of social gender equality.
@@vault34overseer Yes. There is a massive pressure to be perfect and the top in East Asia. This also explains the massive suicide in Korea and Japan. I hope this changes sometime soon.
"The national bank is supposed to control inflation"
The Venezuelan national bank: what was that?
*laughs in 100 trillion Zimbabwean dollar note
BCV: "Y nos tomamos eso personalmente".
@@Chicken_cocknballsoup7376
Zimbabwe: How can we fix our hyperinflation?
Weimar Germany: Keep printing more and more money and if it didn't work, just keep printing more and more money and it'll definitely work!
the cost of living is so high that younger generations cant afford to have their own family thats the real problem
THAT is their plan.
Same in the UK
@@roman648 Pretty much same for all of developed Europe.
Same in Greece.
@Buckminister Fuller This makes me think it's better to be born in a developing country than a well developed one. At least one doesn't have to literally work to death like the ones happening in Japan.
So essentially Japan was doing so well that it started doing badly
it literally couldn't get any better
Sort of. This video missed the fact that japan subsidized its car export industry and others for many years. It kind of cooked their books in a way. Cant believe the video overlooked that, it explains alot
@@Ryze255 do you mean that by subsidizing the manufacturing, they gained shorter term market desiribility at the expense of not being able to accommodate future demand/far fewer subsidies?
@@pronoydutta614 i dont know what they hoped for long term. They mostly did it to deflate the yen at the time. It worked, crushed competition as well.
True, you're absolutely right. Japan was doing quite successfully economically that she pissed off US, triggering economic sanctions and she ended up having to install variable exchange rate of JPY.
Someday or so, Hentai is racing its way to become Japan's most valuable export.
😂😂🤣😭😭
Sounds true
And rice!😂 Rice will always live! No rice No life😂
Rice and hentai. It scary how true this sounds
@@last5902 nice NGNL reference
"The central bank is supposed to control inflation"
The entirety if South America: X
South America: We don't do that here.
Only in Venezuela lol, inflation in countries like Peru, Ecuador or Chile is really low
@@diegovasquez7610 Venezuela and Argentina
Brazil CB be like: Yeah we can control inflation but then investors will hate us so we keep inflation high and now ppl will make an insurgency against the government
There four types of economies in the world: developed countries, developing countries, Japan and Argentina.
you forgot Venezuela in that mix
Ara Cacao this was a quote from the 1900’s
@@DeadGiveAway. welp, i didnt know that mate, thanks
@Emad Ahmed During the beginning of the 20th century, Argentina was one of the richest countries in the world.
But over the course of a century, from a developed economy, it became a developing economy.
It is the only known case of a rich country that became poor.
And why's that??
I was going to make a video on this, but I'll be damned if I'm gonna do better than that.
Well done!
Do a video
Do a video
Do a video
Do a video
Do a video
You ignore a very important thing about Japanese debt. 50% of Japanese public debt is held by the Bank of Japan, and 90% of the rest is held by Japanese investors. This means that Japan is in effect lending to itself. This is what makes the debt sustainable long-term, behave if the government wished it could simply pay the debt back without creating a serious liquidity crisis. Debt is not a problem for Japan because it is a monetary sovereign.
WoW.
100% true but this only is to a certain extent. The fact that it is 2.5 times gdp and the country hasnt failed is PRECISELY because of that. But i think they are close to the limit of what they can borrow.
True
Then the worst that could happen is the fall of forex for Japanese Yen. Then there's also digital money's rise and crytpocurrency. This maybe a tin foil hat conspiracy but this sounds like an anime plot.
Mexico gdp is to surpass Japan in the next 30 years… enough said
It’s almost like a global economic system based on infinite growth is not sustainable since infinite growth doesn’t exist.
Exactly but many companies like Disney and Microsoft work on constant gains and they sacrifice important parts to cut costs to make it look more successful when they are not look at gaming companies.
@@faustsin9366 "when they are not look at gaming companies" mind elaborating on that line since I'm confused
@@Bob-tq9ny I think he is referring to Microsoft's recent acquisition of many gaming companies and expanding expanding reach in the gaming market through consoles etc
It's kinda silly isn't it? By every material measure imaginable Japan is a successful country, with a quality of life other countries could only dream of, but according to the rules of capitalism it's a failure.
It kind of has though due to world populations growing pretty much non stop for centuries and every country experiences a massive boom after industrialization. Some countries experiences industrialization FAST so they saw that boom in a single generation like in China while countries like the UK saw this boom over 100+ years
Anime became popular in the 90s. Japan's economy stagnated in the 90s. Coincidence I think not. Hotel Trivago.
Yep, it's big brain time
Thank you Sonic, very cool.
And they ask where the birth rate went
punctuation
You say that like it's a joke
Japan was a fully industrialized nation for decades before WWII, they didn't go "through their own industrial revolution" postwar, it was just rebuilt and expanded
@一山田 It was part of both Japanese efforts and foreign investment.
This is the only comment correcting this mistake. Thanks.
Don’t those “rebuilding and expanding” lead to a change so deep in social factors (one example being thar Japan’s Emperor was just a symbol from now on) that reorganized even how the remuneration of labor and remuneration of capital worked?
The changes in these two remunerations and how they depend and clash with eachother is called an industrial revolution.
Sorry, english is not my first language.
HE should have mentioned the role of the Meiji Restoration on the country
there's a difference between industrializing and going through an industrial revolution. Industrial revolutions happen under free economies where the advanced technology and economy of scale lead private businesses to high feats, whereas industrialization happens both in "free" economies and "command and control" economies. Prewar was Japans Command and control industrialization leading into the war in china and eventually WWII when they bombed pearl harbor. After the end of the war enough industrial infrastructure was destroyed that they could essentially redo their industrialization but under the free market which lead to far greater economic success.
1) Low inflation + high growth = perfect
2) High inflation + high growth = stagnation
3) High inflation + low growth = stagflation (stagnation + inflation)
4) Low inflation + low growth = deflation
Japan went from 1) to 2) to 3) to 4)
And turkey went from 3 to 3 to 3 to 3 lol
*I HATE MY LIFE*
@@bkgnkprt 19 enflasyon %7 büyüme bekliyor world bankları bu yıl siktigimin siyasetini bırakıp enerjiye yönelsek bak türkiye nasıl uçuyor.
@@orkundislike3264 asgari ücretin 300 euro olduğu ülke uçuyor amerika kıskanıyor .d
@@murathanayanoglu3315 asgari ücret nereyi belirliyor ülkedeki enerji kıtlıgı olmasa cari fazla vericek ama sizin gibi aptal atatürkçüler herşeye karşı çıktınız
@@orkundislike3264 asgari ücretliler bir ülkedeki çalışanların yarısı olunca alım gücünü belirliyor. araba ,teknolojik ürünleri fiyatlarını geç ülkede meyve bile lüks oldu sen bana hala aptal atatürkçü diyorsun, keşke akıl olsa da görebilseniz vahim durumunuzu.
"in a world that assumes that growth will continue forever".. sad but true statement.
You forget that GDP per capita is in Japan larger today than in 1990. This as the population is shrinking.
Björn Lundahl does this account for inflation though
THEDUCKTAPE14 No, real GDP per capita has risen.
@@inlibertywetrust425 I think he means that it doesnt matter. Even if GDP per capita is slightly higher by a few percentages inflation since the 90's is easily 50% so unless the gdp per capita is 50% higher its still not doing as well as it was.
The central bank it's subsidiaries and it's bloodlines, truly the enemy of the world.
well the GDP per capita is calculated by dividing the total GDP by the number of people. So if the population is schrinking, that would make the gdp per capita rise.
"In a world that assumes growth would continue forever." That is human folly, and we fall for it everytime.
Growth changes form. Nothing can grow forever. The idea of growth changes.
Make more with less. Be more efficient. Nobody assumes infinite growth, but it's pretty sad to see so many people assume that increasing prosperity relies on an increasing resource base.
@North American UA-camr yes but overall we grow...
VineFynn
True. Better efficiency is really what a good nation needs. Constant growth can cause issues, and it did with Ancient Rome, it got too big.
The Avatar The main issues of the Roman Empire were mostly social tho.
Right now every 100 Japanese people have 163 jobs, meaning employers have to improve working conditions and salaries as much as they can to even find an employee.
hard to imagine as in other Asian countries, competing for a job was THE most dreadful thing that people have to deal with.
this is the outcome of low birth rates coupled with extremely restricted immigration
the trick is to hit on the right amount of immigration to maintain high living standards for the population but also have the work load be low enough that people have time to have families
"land of the rising debts" sounds like literally every country today.
"House Of The Rising Sun" in the background. I see what you did there.
I was literally searching for a comment pointing this out :D
Just realised the piano playing in the background was house of the rising sun, great reference.
Found my peeps. . . . . .😊
Yeah woah
love that song
"The central bank is there just to control inflation"
-Argentinean Central Bank
*Hold my beer*
Hey what can I say some people are bad at their job.
Well sounds like they controlled it, but it sounds like someone accidentally pulled the lever all the way back.
@Mr Doggo In south asia the government is corrupted in most nations .
@Mr Doggo yeah like 12 years ago here in Nepal we had a king and the corruption was comparatively far lower than what it is today
Wouldn't it be "hold my mate" though? :P
Looking at Japan’s economic stagnation from an economist lens- I think one of the key catalysts for the stagnation was the Plaza Accord wherein a bloc of western economies led by the US forced the intervention of the Japanese Yen, leading to sharp appreciation against the US Dollar and the West German Deutsche Mark. For an export economy like Japan, especially at a critical point like that in 1985, this basically accelerated decades of decline and made Japanese manufacturing and exports less attractive price-wise and led to the start of the bubble collapse and Lost Decade period.
I think its birth rates more than anything. While the Economy hasn't grown the productivity of the average Japanese worker has. Its just that the aging population is a bigger and bigger chunk of the population offsets that. Most other developed nations are propped up by immigration. IDK raising the retirement age is probably one of the of the best ways to fight the aging issue many countries face but thats almost impossible when they often control the country.
@@guppy719 Raising retirement age, much like all of the possible stipulated solutions, is just
let's leave the grandpa's to die and go from there
I lived and worked in central Tokyo in the late 80’s, only 15 minutes from the imperial palace. They were on top of the world then and the spot on my floor where my shoes sat was worth $33,000.
How much was rent
@@jebojebic1621 It amounted to nearly 100,000 a year. And this was years ago.
@@lymancopps5957 oh man. . . that's a lot of cash
@@lymancopps5957 Japanese yen or dollar?
@@InternetAntagonist must be dollar i guess. cant be yen its too little for a year rent
"Land of the rising debt" with "house of the rising sun" instrumental in the background. Brilliant!
It actually is a mistake, as House of the Rising Sun never referred to the East. It is a common misconception.
@@Elucidator- Japan's known as the Land of the Rising Sun, it's just some wordplay that the creator decided to have some fun with.
But yea, there's definitely some people with that misconception.
@@AstolfoCh I know, but it plays on that mistake. That being said, I am nitpicking here, as it is a great video ;).
But Land of the rising debt, isn't that the US ? ;-) (consumer debt per household in US is higher than Japan)
Yeah but since the US Federal Reserve basically owns the world and all major monetary transactions in it, the US is so hyperstable its debt doesn't actually matter anymore. Literally every major monetary transaction in every major industry is done in the almighty Benjamin, which the US Fed Res. could collapse at any moment. Also, fun fact, we're constitutionally unable to default on the National debt so the US is generally viewed as a great place to purchase bonds.
That thumbnail was savage.
Yeah, really savage and iconic.
So? I’m Japanese but this is nice thumbnail.
@@yoshiomiyuze856 it's funny
@@yoshiomiyuze856 i think they're using savage as in "cool"
Adding nothing.
The soundtrack with "The house of rising sun" in piano was certain a great choice
llol
Glad I wasn’t the only one to notice
Providing your population doesn’t slip into abject poverty, and you’re producing enough stuff to keep your people happy, what does it matter if the economy is growing? Also, if robotics are filling jobs, why does it matter if people are less productive? Honest questions.
yes creative jobs are still there . ai and automization will only replace jobs with repeatation , at least in the start
Most economies aren't self sufficient. Economies' like Japan need to import a lot of stuff that they can't grow/make on their own. So its important for them not to see a day where their exports become less valuable and imports become more expensive.
Yeah except Japan probably isn't self sufficient for its current population. They need to make something, anything, that they can sell to outside to get what they need.
We probably need a new model for sustainable economies that do not grow once they reach a level such as Japan's. Infinite growth makes no sense given limited natural resources. We will all need to live in welfare states with only part-time work, or none at all. Time for a massive re-think.
The problems are and have been many. For e.g. the suicide rates among the young is the highest as most are insecure about their future. Also cost of living has become so high that for many the only way to survive is living in net cafes or cyber cafes. ua-cam.com/video/MtdupS0gRt0/v-deo.html
Immigration could have helped them but their own taboos of meeting and being with other people meant that migration hasn't been a success story unlike in many other places.
One crumb of comfort for Japan is that most of that debt is domestically owned so it is easier for it to continuously roll it over. Having said that, that is still a type of kicking the can down the road.
@Leopold You really think the bankers set your ancestors up to be in debt just to let you out?
@@Mm-vr9mt You're right, it's time we kicked the bankers out of our economic systems and wiped the debt by removing the banks. They're as dated and obsolete as the capitalist mechanisms that created them.
Dreamed up in a time when growth was happening everywhere they assumed that growth is the default state of being for an economy.
It's terribly naive.
@@Madhattersinjeans It's a harsh path filled with corruption and monsters that have mastered the use of the mask hijacking the very human ingenuity they fear but the truth out lives the all and it's a human to kill a monster.
@Leopold Thank you I was just going to start looking back into them after the government debt started spiralling out of control.
@Leopold Oh I doubt it will as they have plenty of safety nets, I just mean the government is buying up so much of its own debt I can just see them get left out to dry or taken for everything they have by the same scum that set them up in the first place, I'd prefer it if the filth just grew a brain or even a conscience but I think that's hoping for too much considering their history.
This kinda makes me wish I randomly got into economics... I'm sure that feeling will be gone tomorrow tho…
maybe
Brandon-Todd Hutchinson was it gone?
filip biderholt Nope -still lingering 😬😂
Me too.
Just pick up Econ textbooks. You don’t need a degree to understand the basics
That_ Dude 😂 I hate you and no 😭 But if I can manage to find work in these times, I'll look into buying a reputable book like buddy above you mentioned
Germany and Venezuela: Have massive inflation rates
Japan: I wish I had your problem
4:41 "there are so many factors that caused this slow down so I'm just gonna skip them all while conveniently leaving out the Plaza Accord of 1985 too"
@Coolgamer127 lol based
there are many factors..? this is a fact. its funny how many comments here contribute it to just one thing.
@Coolgamer127 don't like hearing how America fucked over its supposedly precious submissive little Asian devotee ally?
@Coolgamer127 no i think japan surpassing america's economy when it was skyrocketing was very much remaining to be seen. it's way too small and doesn't have colonies like other small yet large economy countries. i just don't understand your response to the original comment. you trying to pretend the plaza accords weren't instrumental to subject matter of this video?
@Coolgamer127 truuuuuuuuuuuuuuuuue
“Print a S*** load of money!”
That’s the game plan guys
Yeah but when I do it the feds get all cranky like WTF?!
it will cause hyperinflation if they do that
WE FIXED THE ECONOMY BOYS, DEBT IS NO MORE.
Zimbabwe: You won't do that if I were you.
Idi Amin approves of this!
The reason why Japan entered it's stagnation is two words: *Trade War*
US went to trade War with Japan in the 80s and won, ending Japan's low fixed rate currency (which had made their exports attractive) and opened up their markets (like semiconductors industries which became less competitive with more US imports into)
Surprised the author didn't mention this. Agreement was finalized in 1988 and Japan lost a booming decade afterwards, becoming stagnated with their aging pop.
Authors videos have a clear USA/Western bias, this trade war was the main reason but for some reason wasn't mentioned
Very good point
I have been listening to most of this channels videos. It always leaves out the major part of U.S. cost for the down turn. But if US was the cost of uprise this channel will surely mention it. Just another biased youtube channel
The US may have played a role but that was decades ago, they need to get up their arse and modernize their corporate culture and society
There were other factors. A key one is Tokyo's shortsighted agreement to limit car sales to the United States. South Korea did a great job of filling that gap. Economics explained really should make a video exploring *all* of the causes. I'm sure that he has the ability to make it "entertaining."
"land of the rising debt"
i died so hard
This was surprisingly informative and entertaining. Now, the real question is whether I am going to click on Norway: Is it The Perfect Economy? video. It sure is tempting me.
Just a few points of the debt:
Most Japanese debt is owned domestically by Japanese citizens and entities denominated in Yen under Japanese law, so it is an internal issue as the money is in Japan. This is different to US debt where foreign entities have a substantial stake.
The debt is still manageable because Interest rates are extremely low, combined with Japan running a current account surplus means that till this day JPY on the FX markets is still viewed as a safe haven trade. and the Japanese economy is not in crisis.
Additional to that the other part of debt is given out by the biggest allied nation, the USA.
This makes a huge difference because the USA wants to keep Japan strong for competition with China.
So the USA will never stop giving out low interest dollars to Japan.
This train goes full circle. The Chinese hold most of our debt, and they also keep their currency closely pegged to the American dollar--they're as vested in our economy as their own, as they walk in locked-step; the dynamic bond between our nation's business is without parallel in history. That, and Americans hold most of their own debt as well. Lastly, it doesn't matter; America is about the last player at the table that can arguably decide to simply flip the board game, pull out a gun, and say 'I aint paying'---a sentiment that sends the world into a financial crisis---that brings out the next game Americans are professionals at: Delivering Freedom.
@@jakehix8132 nicely said
I don’t see a problem US having foreign debt? It is actually better probably as it brings in more cash...
The japan might not be in crisis. But they can't get out of the debt they created. Basically they go stagnant with low probability of growth
You know what’s ironic; when explaining Japan’s growth in the 80s and 90s, we talked about all of the innovation and new product development. But for some reason, when talking about how to solve stagnation the conversation quickly shifted to cheap QE tricks like lowering interest rates. But we just talked about where growth and prosperity comes from.
It would be like getting your education, beefing up you resume and networking to get a high paying job but when you lose the job you try to fix it my refinancing your home and day trading.
Ppl understand perfectly well what activities create value but we use all of our brain power to think of ways to avoid having to do those things.
Greg Belcher economists talk about economic things. It’s much like thoughts and prayers. Magic things to do instead of real work.
people already are getting all the education they can
in germany 70% of people have phd and they still have a stagnating economy
there is just WAY too much competition nowadays, the cost of living is too high and hence the economies around the world are stagnating
people ARE doing as much innovation and product development as they can
sidd harth There aren’t any major countries with PhDs representing over 4% of the population. I think PhDs are about 2-3% in Germany.
Further, I don’t think a population of majority researchers, scholars and teachers would necessarily make for a strong economy.
Last, I don’t think the German economy is in stagnation. 2.2% avg GDP growth over past 3 decades with inflation roughly half that is pretty good in my opinion.
www.weforum.org/agenda/2019/10/doctoral-graduates-phd-tertiary-education/
60+ y/o's lose their ability to innovate. But these old japanese businessmen are refusing to let go of the reigns. Young people are not in the right environment to innovate in Japan.
I agree with you and can see lots of people doing what you said!
I don't know anything about economy but this taught me a lot in a little over 10 minutes. Great video!
Now retell without watching it again. 🧐
Japan: Hey Italy, I hope you’ve been well since ww2 (since you did so horribly) . Anything new?
Italy: Well my economy got better but there’s not as many babies being born and nobody’s hiring the younger generation because the older people are better in employers’ opinions.
Japan: WAIT, YOU TOO?!
Then open country for immigration
@@krunalraghavani228 as long as their are standards for people coming in then by all means
@@j0JP sorry to hear that my Italian friend
@@j0JP there is no retirement age set by government?
@@Ash-dj5ph the maximum age is 67, obviously it depends on a lot of factor, but usually it is around 60
came from eve online videos
stays for real nation videos
funny. thats how i got here too
Kitra Mika I doubt he would sell out and make videos on non-fictional countries.
Need more eve online hahaha
Trippy there so many people that we bound to run into each other
Eve: The one game with GDP
Even though the total GDP of Japan has stagnated for 25 years, the overall GDP per capita has risen because Japan’s population is declining. Productivity per person did not stop increasing during this time.
Well that can't be a good thing
It will stop increasing when the population gets too old.
plaza accord is catalysts
@@putraduha3176 Why does it have to keep going up. It can't go up forever without inflation. And inflation is just devaluing the money people have. Stop making the rich richer the world doesn't need endless growth.
zxy2271 null No
house of rising sun slowly played on a piano in the background, nice
Thankyou! You were the only one that could explain the relationship between interest rates and inflation well enough for me to understand. You make fantastic videos
"If you live in a developed country, go to your Central Bank's website" American president Andrew Jackson sweats nervously.
IRS control USA
Andrew Jackson: rolling grave.
Andrew Jackson the only president to fight against the precursor of the IRS and win in his lifetime
@@richierich1835 you might have mentioned Lincoln also, in that regard.
@@richierich1835 My comment really was not a criticism, nor a retort. It was to acknowledge your excellent point. A handful have tried, and paid the ultimate price for us all.
@@richierich1835
I miss President Andrew Jackson!!!! We need an Andrew Jackson these days!
Imagine the US only having 22 trillion in debt 😂
That's less than half the debt to GDP ratio of Japan
@@user-ec2tu2ze6g Most of the debt is internal debt ie: student loans, mortgages etc. It doesn't effect the economy
@@c4ptainz4ch_69 internal debt does affect economy, just not directly.
@@ritwikreddy5670 Yeah. Sooner or later its going to haunt them.
@Allen Portz Not wrong
Japan - golden years are over
China - golden years running
India - Golden years to begin
@KA you watch China
Did no one else notice that the background music was "The House of the Rising Sun" ?! @Economics Explained, you are a GENIUS! Love the reference to "Land of the Rising Sun" and "Land of the Rising Debt"
One of the insane things about Japan to me is how much they continually innovative, but how little they try to export a lot of the innovative products. I think the reason is basically no one in Japan understand outside Japan. Even companies like Sony and Panasonic seem confused as to why their products fail or succeed.
What are their newest innovations?
@Hyun Soo Kim whats the name of the director?
Can you mention anything recently innovative in Japan while most Japanese are just conservative old men who want to abuse young foreigner labor force? Sony can't even compete with Chinese and Korean companies in smartphone and laptop manufacturing industry. Panasonic is already near dead state and with average population age is over 50 yrs old, Will they create anything "innovative"?
@@kilianamado5451 I don't know know about an IT director, but I know the Japanese cyber security director, Yoshitaka Sakurada, admitted to never even touching a computer. Way more important than a IT director! He didn't even know what a USB drive was.
@@giale9833 It's been about 5 years since I lived in Japan so recent is hard to say. Also it's not groundbreaking like the introduction of the smartphone or anything. Really depends on what you're looking for. I could go on and on about art supplies, home appliances, storage solutions and stationary.
Also beyond innovation there is also fashion. There are a lot of small labels that run smaller stores or sell out of bigger stores in Japan and while Japanese/asian fashion is in high demand in the west it seems like the Japanese brands are way too reluctant to get on the international market. With Korean brands they'll at least ship it a lot of the time even if the shipping is pricey, but a lot of Japanese brands don't even want to ship no matter the price you're willing to pay.
I know some bands that I got hooked on have their songs on Spotify and iTunes, but it's region locked. Which is again just refusing money from foreign markets for little reason.
Wow, this channel is turning into a gem... keep up the good work.
Thanks mate really appreciate the kind works I am glad you are enjoying :)
@Ermhs Parasoidis Yeap. Like misunderstanding causation with correlation. This video is pathetic try to explain complex historical situation. The "why"s and "because"s are just pathethic. No country, at least when discussing export, lives in a vacuum.
Loving the stock shots of the oldies. Another great vid. Thanks bro
The music makes it so much enjoyable. Nice explanation by the way
"Stagnant" is the sweating banker's word for "stable."
Thats why the central bank fear the deflation, im from argentina, and hearing that the central bank of japan fear deflation and for that they print money for GENERATE inflation (there is not such thing like healthy inlfation) makes me so anger.
No. The normal thing is growth, that is stable. When there isn't growth that is stagnation.
@@gabrielonibudo5710 Perpetual growth is not possible when there are limited resources, which is the current situation humanity is in being glued to earth. It is to the detriment of the people that many states today are centered around creating infinite economic growth at all costs. The state should reflect the will of the people who gave it its identity. Due to this typical policy of "infinite growth" that most states have taken on, though it mainly seems to be growing wealth for a select few in the west, the west is advancing rapidly into social, economic, and political crisis. Democracy for example doesn't even function in the United States. The President and bipartisan system acts only as a scapegoat for the permanent state. No matter who you are voting for, corporate interests are protected, conflict in the middle east is advanced(see: corporate interests), and immigration is increased(see: corporate interests). "It's trump's fault! It's Obama's fault! It's Bush's fault! It's Clinton's fault!" working as intended. It's the fault of the state.
On the subject of "corporate interests", it is actually quite silly that we have decided that democracy is the best system for our nations to operate. The Ancient Greeks experimented a lot with democracy. Do you know what they did? They ABANDONED it. And guess what? They told us IN DETAIL, WHY they abandoned it. Not only is there the problem of power being in the hands of people who know nothing of statecraft, but at its core democracy is a contest of popularity. Wealth is an enormous determining factor in popularity. What the Greeks observed in democratic states is that the wealthy would use their resources to boost political candidates into popularity, in exchange for political favors. Sound familiar? This is how they figured out that democracy inevitably devolves into tyranny. Look around you.
Senti
1. Nice job generalizing Greece as partaking in an Athenian democracy at the time without taking into context of how diverse Greek city states were in terms of government.
2. You also forget that, oh I don’t know, they got conquered you absolute moron.
3. A democracy isn’t destined to be tyrannical (San Marino and Switzerland come to mind), a poorly managed one will, like the Roman Republic.
4. Athenian democracy isn’t the same as a modern democracy.
“The land of rising debt” me too
Thank you for your tremendous videos. I have learned an unbelievable amount by watching them. Your brevity is the key to your success. I wish you all the best success in this truly worthwhile endeavour. Pete.
I don't know why I got so into economics videos but this channel is entertaining af
So Japan has learnt that it's easy to grow when you're still in shambles and that a fast growth rate means you will reach your potential early not that your potential has magically become higher.
That is a huge oversimplification. The potential peak of an economy, if that even exists is not fixed. It changes constantly based on several factors. It is completely possible for instance that if Japan's economy grew a lot slower in the last 50 years, its potential peak would be much lower.
@@LegendTheAnonymous There is an order of magnitude difference between how fast you can reach your potential and how fast you can expand it further. Saturation is a universal phenomenon that applies to almost any process, Japan's economy not excluded. I find it hilarious that people are flabbergasted by such simple and natural things.
viharsarok I’m not sure you completely got my point but have a look at the Solow or Romer models and you’ll get what I mean.
Is that a piano rendition of "House of the Rising Sun" playing in the background?
Correct!
Nice spot!
I knew I wasn't crazy lol
as im sure youre aware, its because japan is known as the "land of the rising sun", because of its geographic position so far east.
Would Much prefer it if videos did Not have background "music". It's the information we come for.
Thanks for the upload.
I feel like learned so much without even trying. Great video.
Hi Guys exciting news, as widely requested I have created a Discord server for this channel. This is my first time making this type of server so I hope I have done everything correctly. Feel free to come hang out and chat, or even just come and get help with your economics homework :P
discord.gg/TjWDPAA
Economics Explained The Marshall plan was mostly anti-Communist. The US Congress passed it, and it only passed because of fears of the communists. The US was highly tempted to be content to sit and watch Europe rebuild by itself otherwise. Had the Soviet Union not been as powerful as it was, The Marshall plan is just as likely not to have existed.
Not to mention every side was playing real Politik, even to the point the entire eastern bloc countries were a byproduct of an agreement under the table between Truman and Stalin, so that both could have territories critical to their interests.
The invite link to your server is invalid :/
Hello, that Discord link doesn't seem to work :(
Fragmentation is the natural destiny of all power.
Pretty much the same happened here in Italy (though our economy is far less efficient than Japan's). Declining population, no capability to reduce the debt are the factors leading to stagnation, as long as declining in competitiveness. Same is happening throughout EU. I suppose every developed country will experience the same
I wonder what would happen if this happened in every country in the world ? ( Which would take a super long time obviously because some countries are at very early stages )
@@awsomemodels That literally cannot happen to every country in the world - there are developed and still developing countries.
If developed country stagnates - that makes "room" for a developing country to shine :-)
@@igorthelight Makes sense , i also think that not all developing countries will develop and not all developed countries will stagnanate 😕
@@awsomemodels Agree
@@DesertsOfHighfleet
Wouldn’t that just lead to the broken window fallacy? You know, where GDP is growing on paper but not in a way that actually improves the country?
15 years ago, almost everyone used Panasonic TVS in my village, Now, I see LG or Samsung
Instead of Nokia, I see Samsung or other Chinese brands, Guess Korea will take over the leadership
I never knew suffering from success could be taken literally
My friend is working in japan. He said most of his older co worker are single and don't have family.
well they can't have time to fuck if they slave themselves with work 3/4 of the day :(
@ Exactly life of a japanese worker is that of a worker drone its horrifying no time for family or personal life. Also a lot of the children have seen what their parents marriages went through and they are reluctant to marry.Plus with the abundance of JAV and hentai men have lost their hunger for women in japan they call them herbivore men.
NTH THN You have just solved the African population explosion issue.
Same issue in the US. Too expensive to have kids right now...
well US got same problem also.
Amazing video. So many questions I had got answered here. Thank you!
It is full of misinformation
@it's rewind time everybody what facts? That Japan has the best unemployment rate, the national debt to GDP ratio bothers no one, the interview of Suga admitting that there is no limit to gov borrowing or the fact that with huge money supply growth the inflation has remain lower than 1%?
Awesome video. Thank you.
Surprised that you didn't mention about the Plaza Accord of 1985, and the whole process of trade war with the US. The economy of Japan was killed.
Thanks for mentioning this
I don’t think you understand what “killed” means.
If you mention the Plaza Accords, you also need to mention the context behind why they were signed. Behind every export-led industrialization there is a whole thicket of currency manipulation.
Yeah Japan’s economy was “killed” in 1985. They’ve been struggling for the past 35 years amirite. 😑
You embecile fool! No one shall dare to question the might of America.
Hi Guys, hope you enjoy. As always I do my very best to replay to all comments and I want to thank you all for keeping the discussions so civil on previous videos.
Loved this video, good concise explanation of what's happening. Is a video on MMT something we can look forward to?
Good vid, largely informative and free from politcal narrative.
Fascinating. And very well explained.
Thank you for this explanation 👏
If Japan's economy economy is slowing down that means less output in Hentai....
just a thought
Antony Perillo Nationalize the Hentai industry to keep it running no matter what happens, we’ll lose some perks but it’s worth it to keep it alive
Not really if you consider Hentai to be an inferior good.
As more and more people experience decreasing wealth and expected income, more people will turn towards Hentai instead of more expensive substitutes, say, maid cafes, which in turn increases the demand or Hentai. Thus, we can expect to see an upward shift of the Hentai supply curve, as becoming a Hentai artist becomes a more lucrative profession.
When times are tough, sales of alcohol, firearms and hentai increase.
Economy of Sectors is not the same. Hentai Market has steadily grown as demand has ever risen.
@Susan Hes speaking the language of the peasants!
Having this channel bubble up into my front page feed was the highlight of the month.
I desperately wish that more people would take an interest in sciences like psychology, sociology, and economics..... a proper understanding of these topics might actually yield a more properly guided and understanding society that enacts policies that make more sense in relation to these sciences
Xadion .... so true , I was just thinking how a lot of policy is left to a slightly altered direction than the last mistake. I find that to be the complacency factor.. which has general benefits on a whole but slower affect specifically or visa versa. Which ever way your looking.
Very interesting, thanks!
Genius choice of background music!
Would you mind doing a video over Switzerland? I find them fascinating considering they're a country that has historically not had any natural resource or cheap labour.
Switzerland is the banker for the bandits, thieves, swindlers, Nazis, drug dealers. That is the clue to its economic success.
their wealth is built upon stolen nazi gold and off shore accounts for tax dodging people, elsewhere.
Yeah but they are know for their industries of Machinery, Chemicals, and Pharmaceuticals. Which they are literally the Top dog in those areas in Europe.
Not getting into two world wars, while the rest of the world burned surely helped a lot. (btw banking is only around 10% of the economy, even without a single bank switzerland would be richer than most of europe)
bruh they had child workers like 3 years ago
Japan in the 80's:massive economic growth, world's low cost manufacturer, consumer electronics leaders? Invested into infrastructures like high speed rails, airports and metro systems? It's word for word what is happening in China.
so?
The thing you miss though is that the Nikkei went from under 100 in 1950 to 36000 in 1989. We do not see this to such an extreme in the Chinese market. Does that mean the Japanese market was extremely overvalued or that the Chinese market is extremely undervalued? Also worth nothing is that the Japanese stock market at its peak was something like 35-40% of the global stock market while its GDP was 15-20% of the global GDP.
@@samyueldanyo8679 Good point. Can the fact that China is 10 times the population of Japan have an influence on those metrics?
@@Cafeston Sure, but it is a scale game. Hence why having in mind China has been growing the percentages it has for such a long time and its GDP being over 19% of the world's, while the total stock market cap is half of NYSE shows that the comparison between Japan's booming days of unsustainable growth but even more ludicrous spending/investing and China's might be comparable but probably are not equivalent.
@@samyueldanyo8679 I'm comparing as a layman witnessing China's growth from the inside, for a decade. Have you seen-or lived-in Japan in the 70's to early 80's? It's oddly familiar. And i'm wondering if China will know a similar creative boom, as it happened in Japan when they moved away from copycats to become innovators. What do you think?
The setting sun.
This was so dam wholesome ! TYSM!
This video is incomplete without discussing US interference in derailing Japan's growth (e.g. political tactics to destroy Toshiba).
The USA are supporter of free market until it is an advantage for themselves.
They are not special as they think, they do exactly the same of all the other countries.
The reason started before that. In the 1980s, the Japanese economy was growing at an enormous rate and it scared the Americans. In 1985, US forced japan into the Plaza Accord where it depreciated the US dollar in relations to the Japanese yen. This cause everyone to stop trading with japan and eventually lead to the bubble popping and economic collapse
That wasn’t really something that played a role.
Lol stupid
@@rayl3575 What an incredibly one sided view of the question: At the time, Japan basically ran a modern mercantilist economy, trying to develop by maximising their exports while doing their damnest to reduce imports, making the US and other developed economies run an enormous trade deficit towards them trough tariffs and quotas.
They actually skewered the game so hard that a 50% devaluation of the dollars didn't reduce the US trade deficit towards them in the slightest.
An alternative to the Plaza Accord could've had been considerably worse: reciprocity in tariffs and quotas, and Japan's economy would've had utterly collapsed.
When others treating you the same you treat them would ruin you, maybe you should start questioning yourself.
I would not be opposed to 30 minutes long videos, some of this stuff is really interesting and worth going in-depth.
I understood debt, monetory policy and fiscal policy, inflation, deflation for first time. Thank you
great work
I think you overstate the impact of Western Foreign aid, Sure, it did help the economy of Japan rebuild, but it already was a modern industrial nation before the war (about the same level as Italy) and the continued pregress was due to the Japanese own efforts, not just western help.
Yea. There was capacity, it just needed an injection to jump start everything after everything was blown up.
Using Italy isn't a good idea if you want to make Japan look good. Italy's industry at the time was utter horse shit
@@MichaelGarrity At the same time, having all of that land...cleared... meant they could rebuild otherwise dated cities in a more streamlined fashion. Same thing happened in Germany (okay so the soviet bloc also messed up their side of eatern germany but still the western part did see an increase in their economy).
Something which has plagued western nations that have tried to modernise. It's simply too costly to buy up the private property and rebuild the infrastructure. Especially in heavy populated cities like London/Paris.
Not trying to praise the heavy bombing that killed a lot of people but the side effect is it paves the way for a new and improved city structure that can allow architects/planners a chance to reimagine what they want the city to become.
And on top of that, all the soldiers who fought in the war suddenly had lots and lots of available jobs in construction and rebuilding the country. (as a side effect it means those killing machines who fought and murdered foreigners had the perfect therapy to occupy themselves with). Other nations just suddenly had a lot of soldiers come home to a very different world that didn't have as many jobs available and resulted in a lot of economic instability and unemployment/homelessness.
Rationing was still in effect in the UK until into the 60s in some places. The population boom post war put a huge strain on resources at a time when there was less money available.
Only the USA saw a true economic benefit from the war, simply by being the last man standing.
It's better to say that it was thanks to the West not trying to be a roadblock, but activelly encouraging and help the rebound growth after the war.
@gacekky1 I am not saying that the West did nothing. I'm saying that it is unfair to atribute japanese development to western aid, because JAPAN was already developed before the war.
Yes, the West helped to rebuild the country, but the process that made the Japanese economy grow by 10% for the next decades isn't due to some 5 years of western aid, but by japanese public policy.
Saying that Western aid is the reason why Japan is developed is like saying that the Marshall plan is the reason European countries are developed. As in, they were already developed before the war.
0:08 wtf the emu war affected Japan too?
golden
madlad
i still remember the great emu invasion of japan, there was so many emus that the island became a giant emu, the end
We will never forget
No, not emu. I think he was referring to the waifu war.
There's an interesting (historical) book about the topic, titled "Japan's Big Bang" by Declan Hays. In summary the major issues were initially unrealistic land valuation (as mentioned) becoming more realistic, debt carried by overpriced zombie companies being hidden via accounting consolidation rules, and banks refinancing to the scale of bad debt on their books. The Koizumi govt. and Abe govt. did quite a bit to unwind these issues. Persistent issues include land ownership laws and inheritance laws that result in inefficient use of land, rapid concentration of populations in a few conurbations / unravelling of communities outside the conurbations, ageing / shrinking populations. Japan has invested tremendously overseas, which helps their largest corporate entities & balance of payments. This seems somewhat unrecognised from my casual viewpoint. Urban economies like Kanagawa and Kansai conurbations are doing quite ok. It is the other locations whose economies are literally disappearing. National averages hide the good health of some areas relative to the terminal condition of others.
Japan needs a 40-ish visionary, 20 years and something resembling a commitment to change, or else they will just slowly rot away... sadly.
This is the thinking that led to Pearl Harbor.
@@pumpkinhill4570 wat
@@vereinigtekonigreicheoster35 The fear of slowly rotting away compelling you to take drastic, decisive action in hope of securing a long-term solution. Taking big risks rather than watch over a slow but continuous decline.
Sometimes just working to keep things on a level keel and kicking the problem down the road is actually the best thing to do.
@@pumpkinhill4570 👁👄👁
@@vereinigtekonigreicheoster35 Its true - they felt that rapidly expanding their empire was the only way to stay alive - so they went out to get some land. Pearl Harbor was just one of the attacks that week - mainly aiming to down the US for a while, it didn't work.
Japan: "I miss the 90's, it was my time, my moment"
RUNNING IN THE 90'ssss!!
bow down to China
haha bow down to a country that cant operate a bullet train, sounds legit
you mean the 80's? Coz Japanese Economy starting to stagnant in the 90's.
@@Wazzup1991 But that's a meme, so
Thing is, economies can't grow for ever, Japan just turbo its way to its own ceiling I believe.
Let's hope and pray no insurgency unsues in the midst of this, which I believe Is impossible for A country like Japan, for now.
Then you would like malthusianism, economies actually can grow for ever if the population growth is constant and if technologies increase productivity and if ressources were infinite. It can grow more but actually us (occidental countries) reached a plateau.
Swords Chant that sounds a little bit racist
Same with China that's why they moved to develop Africa so they can continue growing
Stört das Ihnen?
Very informative & It took me a while to understand the piano accompaniment backing track choice.
This video was awesome.
I thought Japan was already industrialized before ww2 but the war destroyed it specifically the US air bombings then after ww2 it was just expanded and modernized🤔🤔
Utkarsh Dubey no they weren’t, that was the reason that the American bombs were so effective, most of japans structures were made of wood and easily caught fire and spread
@@philmerc364
In early 90s, Japan was one of the country which has the highest GDP per capita in the world, and Japan's GDP per capita dabbled the US's GDP per capita.
@@caffeine1264 I think they made houses with cheap materials due to frequent earthquakes.
@@caffeine1264 If they weren't industrialised before ww2, how did they build half a dozen aircraft carriers and the biggest battleship the world has ever seen?
@@sweetrain9482 Also Japanese manufacturing was a joke up until the 70's, much like the made in China products today that break minutes after you buy them. No surprise some bombs caused so much damage.
I went to Japan last year for the first time. It felt like until that point i had never visited a first world country. Im from the UK.
Just sayin'.
Yeah but UK is a shithole innit
Because only in Japan you can see that you are in a first world country.
Yeah i felt the same way coming from the U.S. Its economy is suffering, but it remains a very stable and inviting society (especially if you are just staying short term).
@@mellowhead absolutely
Went to Tokio this year and had the Same feeling (Im from Germany )
House of the Rising Sun for the background music. Excellent choice!
Wow great video. only 11.10video cover most of major topics about Japan's economy.Easy to understand thank you.😇