Why does the economy need to continue to grow, especially in countries such as Japan where population is declining?
In: 56
I studied economics and have family ties and lived in Japan.
A lot of the answers get something tremendously wrong:
No, GDP growth for a country with a shrinking population is strictly speaking not necessary.
For wealth of the citizens only two things are important: GDP per capita (meaning overall GDP decreasing while population decreases even faster is no problem) and the gini coefficient showing that the wealth is at least distributed well.
Japan had a rough couple of decades but things have extremely improved lately and a lack of young people also means a lack of skilled workers which leads to much better treatment of said workers. Overtime is at an all time low, maternity leave is amazing, switching jobs easy and high tech jobs pay well.
Also due to a decreasing population many places in Japan are fairly cheap to live in and even Tokyo now offers some of the most affordable housing of any metropolitan area in the developed world.
Aldo many middle aged people inherit a lot of money.
When their parents die.
The only issue is transitionary – who cares for the old and how can retirement benefits be paid.
Edit; oh and the Japanese themselves lament the “death” of certain rural areas where simply nobody will live anymore…
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