The Japanese say they suffer from an economic disease called “structural
pessimism”. Overseas too, there is a tendency to see Japan as a harbinger of all
that is doomed in the economies of the euro zone and America. Besides supposed
stagnation, the two other curses of the Japanese economy are debt and deflation.
Yet these also partly reflect demography and can be overstated. Japan’s economy
works better for those middle-aged and older than it does for the young. But it is
not yet in crisis, and economists say there is plenty it could do to raise its potential
growth rate, as well as to lower its debt burden.
This is good news for Japan. Certainly they have a strong economy, which, with the right handling, could remain strong and grow much more in the future. It seems the only real thing in their way is that "diminished giant" mentality.
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