Krugman was wrong on Japan, and my bet is he will be wrong on China too.
ale_93113 on
China has announced that it would start to shift to a more consumer based economy, exactly what they should do now that they are basically a developed country
it has come later than what economists forecasted, but it is happening
moreover, china has created a very very healthy international trade network that is very suitable for an increase in imports
finally, the downshifting is not necessarily something that must happen, the US has an average age avobe that of china and yet it is not downshifting, europe with a declining working age population also has not downshifted, only japan has, and eastern europe, a part of the world that has had even worse demographic luck than Japan has grown much faster than the US or any other major developed economy
The situation of japan is one that is very particular to the nation, and not something other countries that will have declining working age populations need to suffer, as poland and romania, and the EU and US at large show, and it was caused primarily by a HUGE debt to GDP ratio
Japan has not gracefully stagnated, stagnation is never graceful, and China doesnt have the massive 250% debt burden that has made japan Japanified, no country does
GREECE has avoided Japan’s fate, i am truly lost as to why he thinks Japan is a good example and why china is going to do even worse than japan, despite the world bank raising both the chinese overall GDP aswell as the GDP forecasts after they have announced the shift to a developed country cosumption based economy
2 Comments
Krugman was wrong on Japan, and my bet is he will be wrong on China too.
China has announced that it would start to shift to a more consumer based economy, exactly what they should do now that they are basically a developed country
it has come later than what economists forecasted, but it is happening
moreover, china has created a very very healthy international trade network that is very suitable for an increase in imports
finally, the downshifting is not necessarily something that must happen, the US has an average age avobe that of china and yet it is not downshifting, europe with a declining working age population also has not downshifted, only japan has, and eastern europe, a part of the world that has had even worse demographic luck than Japan has grown much faster than the US or any other major developed economy
The situation of japan is one that is very particular to the nation, and not something other countries that will have declining working age populations need to suffer, as poland and romania, and the EU and US at large show, and it was caused primarily by a HUGE debt to GDP ratio
Japan has not gracefully stagnated, stagnation is never graceful, and China doesnt have the massive 250% debt burden that has made japan Japanified, no country does
GREECE has avoided Japan’s fate, i am truly lost as to why he thinks Japan is a good example and why china is going to do even worse than japan, despite the world bank raising both the chinese overall GDP aswell as the GDP forecasts after they have announced the shift to a developed country cosumption based economy