Why The Japanese Economy Has a Growth Problem

For a snapshot of the Japanese economy we can start with sluggish GDP growth:

 

We should also note their aging population:

 

More than double their GDP, Japan’s debt is large. (However, it is not quite as bad as it appears because the debt that the public holds is projected to fall to 100% of GDP):

 

Meanwhile, businesses do not like falling prices:

 

And, the BOJ (Bank of Japan) has kept interest rates at record lows:

 

Explaining why Japan’s government has not been sufficiently proactive, Bloomberg presented this chart:

Our Bottom Line: Fiscal and Monetary Policy

Facing a GDP growth rate that has hovered close to zero. the Japanese government has had little room to maneuver its fiscal policy (taxes, spending, borrowing) and monetary policy (money and credit supply).

My sources and more: Always excellent for analysis and graphics, this Bloomberg article on Japan’s debt and these infographics illustrate Japan’s economic problems. Please note that the title of this post was slightly edited.