This document provides an overview of Japan's economic challenges including deficits, demography, and deflation. It discusses Japan's post-war economic miracle period from 1971-1991 and the impact of Nixon ending the Bretton Woods system and the 1973 oil shock. It also summarizes Japan's asset price bubble bursting in the early 1990s, demographic crisis as the population ages and birth rates decline, problems with the pension system, and reforms under Prime Ministers Hashimoto and Koizumi to address these issues through privatization, fiscal reform, and other structural changes.
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Japan-Deflation,Demography
1. By group no. 4 Japan: Deficits, Demography, and Deflation 1
2. Road map Introduction : by Manish Fruits of the miracle ,Nixon and oil shocks by: Manish Enduka and The Bursting Bubble and globalization : by Mayank Hashimoto’s legacy : by Saket Japan’s demographic crisis : by Saket Japan’s Pension System and Problem : By Sunil 2
3. Cont…… The Koizumi Reforms : By Prateek BOJ quantitative easing policy, Banks and bank lending : By Prateek Pension reform, fiscal reform : By Ashish Privatization of postal services Takenaka’s challenges Graphic Conclusion 3
5. Fruits of the miracle ,Nixon and oil shocks In 1971 to 1991 Japan’s average annual GDP growth rate was 4.4% After 1991 its average annual GDP growth rate was less than 2% Richard Nixon ended the Bretton Woods system of fixed exchange rates In 1973 , the first oil shock hit the world economy 5
6. Enduka and The Bursting Bubble and globalization After oil shocks, exchange rate effect, Japan’s aggressively reinvest in modern plant and equipment Japanese invested in their stock market, foreign equities, real estate, and foreign debt After Enduka, Bursting Bubble happened in Japan’s and price of land fell by 85% 6
7. Hashimoto’s legacy Hashimoto head of the LDP’s, continue play a role in effecting the structural reforms of his 1996 agenda In January 2001, the number of ministries was consolidated from 21 to 11 7
8. Japan’s demographic crisis Japan’s child birth, fertility rate decline Mortality rate increase Japan’s labor force shrink Japanese worried about maintaining the sort of skilled workforce that Japan needed or advanced manufacturing and services 8
9. Japan’s Pension System and Health care System The basic pension system was financed by a fixed amount of insurance premiums There were two types of supplemental corporate pension plans Employees pension fund Defined-benefits corporate pension In health care programs, private employees, public employees, teacher, farmers, and self-employed people, virtually all Japanese were insured 9
10. Problem 10 Increase in the rate of retirement Not fully funded Needed periodic adjustments
11. The Koizumi Reforms Four part of economic Privatization To write off the banks Structural reforms Issuing governments bond 11
12. BOJ quantitative easing policy, Banks and bank lending Non performing loans Fully utilize the council on economic and fiscal policy New century restoration Banks and bank lending 12
13. Pension reform, fiscal reform Koizumi increase government contribution in retired people pension fund Government increase monthly contribution from Yen 13,300 to 16,900 Japan have serious deficit problem Government holding spending constant and raising taxes, to balance fiscal deficit 13
14. Privatization of postal services Japan’s government privatizing Japan post in 2007, because postal service make more profitable for public Postal service break into four part Post office management Mail delivery Bank Insurance Post office and mail delivery control by government and bank or insurance will open to private sector 14
15. Takenaka’s challenges Takenaka’s worried about budget deficits, public debt, the consequences of japans current surplus and the exchange rate of Yen 15
