They got overtaken by Germany a country with 50% lower population and the gap is widening. Their gdp per capita is below some Eastern European countries and way below other developed countries that used to have similar gdp per capita. Yen’s devaluation is getting faster so in the future I don’t think Japan can even be called a first world country anymore. What exactly caused this? I know Japan has been in recession since the early 90s but this last few years seem to be extra harsh on Japan
In: Economics
Japan has a lot of debt.
Japan can’t raise interest rates, because it means the government and businesses will need to pay more for debt.
This has led them to be unable to raise interest rates while many other countries did.
If you have 1$ and the U.S government is like “Hey if you give me $1 I’ll give you 1.05$ in a year”, and government of Japan is like “Hey if you give me $1 I’ll give you a $1 in a year”. Who is going to give their $1 to Japan?
This has made the Yen not a competitive currency on the global markets causing it to devalue.
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