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Martin Feldstein: Japan's economic quandary

Martin Feldstein

The Japanese economy is a paradoxical mixture of prosperity and failure. And, in a significant way, its prosperity makes its failures difficult to address. Per capita income in 2015 (in terms of purchasing power parity) amounted to $38,000 in Japan, close to the $41,000 average in France and Britain. The unemployment rate, at 3.3 per cent, is substantially lower than the US rate of 5 per cent and the euro zone rate of about 10 per cent. But Japan's economy has now slipped into deflation, with consumer prices lower in March than a year ago, while real GDP is declining. Despite near-zero ...