Japan - Point of No Return

This presentation nicely sums up what we all know about Japan. I must disagree with one point…that a shrinking population is bad for the economy.

True, population growth acts as a tailwind to economic growth. But in the long-run, a smaller population globally is required to avoid hitting the hard ceiling of resource depletion. Population growth only acts as a tailwind to economic growth when other inputs to production and final demand can also be increased. Otherwise, population growth simply leads to shrinking per-capita wealth.

As a net importer of energy, Japan may actually benefit from a smaller population in the long-run.

Japan – Past the Point of No Return – By Vitaliy Katsenelson