Japanese government investing heavily in technologies to help its population age

The – Japanese National Institute of Population and Social Security Research – is the go-to place for understanding demographic trends in Japan. The latest revisions to the population estimates (as at 2023) show that the current population of 125.5 million will shrink to 96 odd million by 2060 and then 87 million a decade later. There is a rapid decline after that expected. The male population is shrinking faster than the female population. Much has been made in recent weeks of Japan’s slide down the GDP world ranking. First, China overtook it into 2nd place a few years ago and now Germany is moving into third place. India is projected to push Japan out of fourth place next year. Some have referred to this as “Peak Japan” with the population dynamics likely to push the nation further down the GDP table. There is a lot of anxiety among policy makers here about that ‘fate’. My perspective differs. In fact, I think that the challenge is not to solve the population decline but rather to work out ways to live well with a smaller population, and demonstrate to the world how a planned degrowth strategy can be achieved with minimal disruption to material security.

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Australian labour market – positive shift in September 2024

Today (October 17, 2024), the Australian Bureau of Statistics released the latest – Labour Force, Australia – for September 2024, which shows that the labour outlook shifted towards the positive in September 2024. Employment growth was above the year’s average and was biased towards the net creation of full-time jobs and underemployment fell. The unemployment rate was slightly lower because employment growth outstripped the underlying population growth and the rising participation rate. But we should not disregard the fact that there is now 10.4 per cent of the working age population (over 1.6 million people) who are available and willing but cannot find enough work – either unemployed or underemployed and that proportion is increasing. Australia is not near full employment despite the claims by the mainstream commentators and it is hard to characterise this as a ‘tight’ labour market.

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Video of Australian book launch of ‘Modern Monetary Theory: Bill and Warren’s Excellent Adventure’

It’s Wednesday and as usual I am writing about a few issues rather than providing a detailed analysis of a specific issue. Today, I publish the video of Australian launch of our new book – Modern Monetary Theory: Bill and Warren’s Excellent Adventure. I also comment on the current situation in the Middle East and finish with some great music from the rather odd collaboration between Oscar Peterson and Stéphane Grappelli in the early 1970s.

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The British government does not have to appease the financial markets

Sometimes one journalistic piece captures the problem facing those who are trying to change the economics narrative and promote an alternative framing that is ground in the reality of the system rather than one that serves to reinforce the dominant ideology of the elites. The opinion article by Larry Elliot in yesterday’s UK Guardian (October 13, 2024) – Labour’s challenge is complicated by the triumph of finance. That’s bad news for UK plc – is one such article. It summarises how far the progressive debate and the British Labour Party has become trapped by fiction. It demonstrates clearly how if we start off assuming that there is a rigid constraint on decision-making then the bind will lead, invariably, to poor decision making because the opportunity set is so artificially limited by the starting assumption. I am amazed really that progressives in Britain (and everywhere by the way) still adopt this flawed framework for debate and decision-making. So let’s work it out properly.

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More misery and dysfunction coming for France – as the fiscal rules bite

For all those Europhile progressives who have held out that reform is the way to deal with the neoliberalism of the European Union and even, in some cases, claimed that the austerity mindset was over (once the fiscal rules enshrined in the Stability and Growth Pact were temporarily suspended during the pandemic), the behaviour of the French government should wake them out of their delusional reverie. The new Prime Minister addressed the National Assembly last week and outlined a new fiscal direction involving significant expenditure cuts and tax hikes. His plan will not satisfy the European Commission, however, who under the Excessive Deficit Protocol (EDP) have indicated they want a faster transition back to the fiscal rule thresholds (that is, even harsher austerity than Barnier is proposing). This policy shift is in the context of an elevated unemployment rate (which is rising) and an already significant output gap. The austerity is likely to push the unemployment rate towards 9 per cent (around) and will be a disaster for the prosperity of the French people who are still enduring the cost-of-living fallout from the pandemic and the Russian-Ukraine situation. Add in the possible impacts of the Middle East crisis and we have a failed state. Once again the fiscal rules defined within the EMU architecture are going to deliver shocking outcomes.

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Shipping disruptions unlikely to precipitate another inflation surge

It’s Wednesday and while I usually have a few topics to discuss, today I am concentrating on the recent disruptions to shipping channels and the likely impact on inflation. I was also hoping to post a video of the recent launch of my new book with Warren Mosler in Melbourne on September 12, 2024 but the editing is not quite finished. If we analyse the shipping data it is quite clear that global shipping channels are being seriously disrupted by a number of factors. Most particularly, the Suez Canal is becoming unusable while the Panama Canal is struggling with water levels following a devastating drought. The impact of the former has been for major shipping companies to divert their movements around the Cape of Good Hope, adding time and costs to the freight deliveries. If we reflect on the implications, the most reasonable conclusion at this stage is that these shifts in shipping patterns are unlikely to precipitate another surge in inflation. There might be some temporary cost and price shocks but I cannot see them persisting. And, there is nothing here that is relevant to central bankers.

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