Saturday, May 18, 2013

Has the Japanese Economy Really Sucked as Much as I’ve Been Led to Believe?


As doomsayers have changed their sell on Abenomics from it’s not going to work to it’s not really working to it’s not working that much all thing considered, I began to wonder, how much have we sucked, all things considered, anyway? The very first numbers that I looked at surprised me. I’m not an economist, so I’m putting them out there, just in case anyone is interested.
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How poorly has the Japanese economy doing this century, say, relative to the rest of the G7? (Remember those countries?) Depends. The following chart shows the quotient of GDP in national currencies at constant prices, with 2013 and 2000 figures as dividend and divisor. It puts Canada ahead of the pack and the United States second, with Japan a disappointing sixth.
Canada
1.277962

United States
1.234331

United Kingdom
1.212253

Germany
1.15034

France
1.135103

Japan
1.111628

Italy
1.001247

International Monetary Fund,
World Economic Outlook
 Database, April 2013
Does this mean that we suck, if not nearly as much as Italy? Not necessarily. The following chart using the same database shows the quotient of per capita GDP in national currencies at constant prices, with 2013 and 2000 figures as dividend and divisor. Italy still sucks, but the rest of them are bunched more closely together. And Japan has jumped to fourth place, leapfrogging France and the United States, just behind now third-place Canada.
Germany
1.156469
United Kingdom
1.119617
Canada
1.11236
Japan
1.107157
United States
1.099738
France
1.048757
Italy
0.934377
Many things could be happening between 2012, when the GDP estimates were put together, and the end of the year, and middle-of-the-pack, 0.8% per capita growth per year isn’t anything to crow about. And the unconventional fossil fuel revolution will give the US economy a leg up on the rest of the G7 (while putting the eight and last-wheel Russia in a conundrum). Still, for now, I can say, “It could have been worse, I could have been in America all this time,” if barely? Or am I missing something so very, very obvious?

1 comment:

Richard Katz said...

Jun,

A couple issues I have with your comments:

1)2013 is just estimates; the last year for which we have hard data for all countries in 2011

2)The starting year makes a huge difference:

If we start in 1991, the last year of the bubble-era growth, then Japan's per capita GDP grew 0.6% per year, bit less than half the 1.3% average for the other six

If we start at 1997, a post-bubble peak, Japan grew an average of 0.4% per year, just one-third of the 1.2% average for the other six.

If we start at 2002, the bottom of the 1997-2002 stagnation, then Japan grew 0.6% per year, exactly the same as the average of the other six. It's not that Japan did any better, it's that the others, in your words, "sucked a lot more."

Richard Katz