Friday, August 01, 2008

The start of the slide downhill for Japan?

With the global financial problems adding to Japan's already significant problems going forward and its lack of a political class with any real ideas on what to do about it, could this mark the beginning of a long slow decline for Japan?

Read the article Japan: Recession-Bound as Exports Slow (which I found via a link at Japan Economy & News Blog in which Ken Worsley writes on the topic) then read the very interesting comment by tubki below it. We shall see, I suppose. I doubt that Japan will be able to switch much if any of its US exports to China's middle class anytime soon. Where are most of China's exports going? If exports to the US slow for China too, where will the middle class get the money to absorb all those extra imports from Japan?

(Note that in the comments on Japan Economy and News Blog that there is some debate over the most accurate definition of a recession. Perhaps it is difficult to explain precisely for economists, but the definition of a recession in the US is actually quite simple: Is there a major national election coming up? If so, the US is always in recession. When Clinton was running in 1992, we were suffering from the worst economy since the Great Depression.)

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