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JAPAN’S ECONOMIC MALAISE: DISCUSSIONS
The banking sector of Japan played in Japans’ stagnant economy. The banking sector engaged in risky lending’s especially during the asset price boom. When the asset price boom collapsed the banking sector was left with a lot of bed debt and to make matter worse the sector went further and contracted the lending. The poor supervision by Japan’s government in terms of fiscal policy also played a pivotal role in the risks taken by the banking sector. The stock market prices also started falling and people saw their net worth shrunk. This also led to the population of Japan reducing their spending which in turn led to the deflation in the country. If the people are reluctant to spend then business doesn’t make money and people lose their jobs. Unemployment also will rise and the government of Japan started spending a lot of money on government grants to ease the burden of the population. In all developed nations, Japan has the highest aging population. This becomes a liability for the country in terms of production, especially for a country like Japan that is one of the leading exporters. All of these factors contribute to the stagnant economy of Japan.
What Japan can do to get its economy back on track is firs by having better relations with it Asian counterparts. Japan can benefit from the economic boom that is taking place in Asia in terms of free trade. Secondly, Japan can turn around the liability that is posed by the aging population. Since the aging population is reluctant to spent, government can improve in an industry that the aging is willing to spend in like the health care services. Government can also increase retirement age and try to boost the birth-rate of the country. The other thing that Japan can do is get woman to participate in the workforce. Japan is known to be a masculine country, and that historically

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