Saturday, January 26, 2013

Since 1974

Lifted from comments -

Following up on my post casting doubt on some of the assertions made in Jesper Koll's "I'm The Last Japan Optimist" TED presentation, commenter Troy has produced a graph of the the population data and populations projections for persons in their earnings upswing years in both Japan and the United States. (Link)

Pretty sobering is it not?

Japan, on the way down (gently) since 1974.

Sure, you can put in a lot of robots to make up for the decline in available workers -- but those robots are really lousy consumers.


Troy said...

I'll have to watch that now . . . the way I see it, at the end of the day all that matters for "sustainability" is (resource) wealth consumed vs. created.

A falling population will make it easier for Japan to feed and power itself (though the marginal food producers will be forced out of business).

Notionally, Japan will not have to invest in any new capital infrastructure -- with sufficient maintenance etc. what has been built will generally be "good enough" as long as regional populations continue to age and die off in place.

Service providers to young Japanese consumers are going to have an uphill struggle of course, but:

This graphic is the best I've found detailing what's coming with the demographics and the youth decline isn't that steep from here.

My oddball version of economics incorporates ground rents as a deadweight friction -- which is, un-euphemistically, a direct tax on the working poor by parasitical corporate and private specu-vestor wealth. The perfect cure for that is a declining household formation rate! Imagine a Japanese consumer economy with housing rents cut in half! People could buy twice the stuff they do now!

If they have more robots and fewer Japanese actually need to work, so be it. So much of the present economy is just a treadmill designed to keep people out of trouble. Maybe the Japanese can lead us to a new model.

As I say alot, I'd rather have Japan's +$3T positive NIIP than the US's negative $4T or whatever.

Japan is forging into untrodden ground, but I think the only way to really understand what's going to happen this century is modeling it within a very fine (and accurate. . . ) agent-level simulation. Just talking about this or that misses something important.

MTC said...

Troy -

So, in your model, one incentive toward increasedfamily sizes is price destruction in the housing market.

Sounds more plausible than most of the ideas I hear or see printed.

The question is, how to square that thought with the reality of the empty houses phenomenon that is peppering Japanese municipalities with micro-slums.