Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Japan Falls into Recession

online.wsj.com

Post reply on HN
Print view View original

101–110 of 201 posts

Re: Japan Falls into Recession

#101

Post by wbl »

dimitar wrote: post #70
JamesBarney wrote: post #59

Earlier quoted context omitted.

While I think your post for the most part did a good job of summing up the issues I am a little confused by the following. "Default and excessive inflation can be a result of too much expansionary policy." While I understand how too much expansionary policy can lead to excessive inflation, I'm curious how it can result in a default.

* If creditors see that you are trying to monetize debt too quickly, they will demand higher rates. * At some level of inflation, seigniorage revenue will fail to increase. * If the government borrows money in a foreign currency to spend too much, depreciation makes loans harder to repay and there is no seigniorage. * If a government refuses to loose monetary policy while spending too much, it will not be aided by mo…

Creditors can't raise rates on bonds. When you issue a bond, you get paid then, and the creditor gets paid later. They can raise rates on new issuance, but the inflation rate is determined by monetary policy, not so much fiscal policy.

Re: Japan Falls into Recession

#102

Post by mc32 »

ekianjo wrote: post #100
mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

> What they need to do is figure out a way to grow the population locally or through large-scale immigration Or drastically increase productivity, or have more people join the workforce. Women are massively under-used in Japan. There's no need for immigration as long as there is a large untapped segment of the population not actively employed.

Integrating women into the workforce is a different issue. It would help to some degree --and the government is making a greater effort in having this happen. As paternalistic as Japan is, given the choice of making life easier for women to join the workforce or allow greater legal immigration in Japan, they have chosen to encourage women to stay in the workforce and to try to make it easier for them to succeed. As good as that is for society, it still will not make up for the structural problems bought on by a declining but aging population _and_ a large and growing retiree population. They need a younger population. Bringing in 10 million retirees from Florida would not help Japan's economy's structural problems. they need young, eager and enthusiastic immigrants to bring some vibrancy to their flagging economy.

Japan has great productivity and has automated moreso than any other country --it's had to due to a retiring population. They need a younger population with disposable income who are willing to spend their disposable income.

Re: Japan Falls into Recession

#103

Post by cynicalkane »

ekianjo wrote: post #91
cynicalkane wrote: post #74

Earlier quoted context omitted.

This is incorrect. GDP growth in Japan jumped when it became clear Abenomics was going forward, and un-jumped when the recent tax increase went in. The annualized growth[1] in between these two periods has been greater than 2%, with falling unemployment, despite a declining workforce. The growth right before Abenomics was negative and falling. [1] For this comparison, make sure to use annualized QoQ figures. Data-ill…

I'm not talking about short-term changes in GDP. I'm talking about longer term ones, obviously. Nothing in Economics is worth measuring on a 6 month scale. Political decisions on the Economical climate take dozens of years to take their toll and have marking impact.

You have things exactly backwards.

Monetary policy is considered neutral in the long run. The real economy is definitely not. Monetary shocks are a passing phenomenon. Loss of GDP hurts for a very long time.

Re: Japan Falls into Recession

#104

Post by quanticle »

ekianjo wrote: post #94
hudibras wrote: post #83

Earlier quoted context omitted.

There's so much about your post which is incorrect that I don't have time to debunk it all. So let me just hit the biggest error, so that others don't have to waste their time: It's literally impossible for Japan to default on their debts, which are almost completely in Japanese currency.

> It's literally impossible for Japan to default on their debts, which are almost completely in Japanese currency. Banks are not going to be super happy when the government tells them that their bonds are worth nothing through giga-inflationist measures. Or are they ? Default is better than nothing, at least you can pick up the pieces, while inflation is literally destroying your economy for any foreseeable future.

>inflation is literally destroying your economy for any foreseeable future.

Is that actually true? Is inflation really worse than default? I mean, we don't have any samples from "advanced" economies, but from the what I've seen, high inflation, in the long run, doesn't seem to be that much worse for economic health than default. They're both very painful, but it's not clear to me that one is especially worse than the other.

Re: Japan Falls into Recession

#105

Post by MarkMc »

bpodgursky wrote: post #27
mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

Large scale immigration is just passing the buck down onto a currently-poorer country. But poor countries aren't going to stay human-meat factories forever, and sooner rather than later someone is going to have to figure out a way to maintain an industrialized society with a stable population.

I imagine that currently-poor countries would love to have the buck passed down to them if it improves their standard of living.

Re: Japan Falls into Recession

#106

Post by ekianjo »

mc32 wrote: post #102
ekianjo wrote: post #100

Earlier quoted context omitted.

> What they need to do is figure out a way to grow the population locally or through large-scale immigration Or drastically increase productivity, or have more people join the workforce. Women are massively under-used in Japan. There's no need for immigration as long as there is a large untapped segment of the population not actively employed.

Integrating women into the workforce is a different issue. It would help to some degree --and the government is making a greater effort in having this happen. As paternalistic as Japan is, given the choice of making life easier for women to join the workforce or allow greater legal immigration in Japan, they have chosen to encourage women to stay in the workforce and to try to make it easier for them to succeed. As g…

> Japan has great productivity and has automated moreso than any other country --it's had to due to a retiring population. They need a younger population with disposable income who are willing to spend their disposable income.

I'm sorry but the myth about Japan productivity has to stop :) I work in Japan and there are the most ineffective and honestly useless jobs out there. People guarding plastic cones on the road. People waiting at the car park exits everywhere to ensure no accident occurs. People at the front of numerous stores and train stations paid to salute everyone passing by. I understand it's all a part of customer service but this is just bringing actual productivity down. And I'm just citing obvious examples here, inside corporations there are tons of underemployed or useless jobs as well and since companies cannot fire people in Japan they carry on the deadweight for decades.

There's so much fat in every Japanese organization out there they have enough to skim out for 20 years and still be in shape.

Re: Japan Falls into Recession

#107

Post by ekianjo »

quanticle wrote: post #104
ekianjo wrote: post #94

Earlier quoted context omitted.

> It's literally impossible for Japan to default on their debts, which are almost completely in Japanese currency. Banks are not going to be super happy when the government tells them that their bonds are worth nothing through giga-inflationist measures. Or are they ? Default is better than nothing, at least you can pick up the pieces, while inflation is literally destroying your economy for any foreseeable future.

>inflation is literally destroying your economy for any foreseeable future. Is that actually true? Is inflation really worse than default? I mean, we don't have any samples from "advanced" economies, but from the what I've seen, high inflation, in the long run, doesn't seem to be that much worse for economic health than default. They're both very painful, but it's not clear to me that one is especially worse than the…

Have you heard of Argentina, or Germany in the 30s ? Both of them did not like Inflation too much.

Re: Japan Falls into Recession

#108

Post by xorcist »

jpatokal wrote: post #90
hudibras wrote: post #83

Earlier quoted context omitted.

There's so much about your post which is incorrect that I don't have time to debunk it all. So let me just hit the biggest error, so that others don't have to waste their time: It's literally impossible for Japan to default on their debts, which are almost completely in Japanese currency.

It's "literally impossible" only in a very literal sense of the word. In other words, yes, Japan can indeed get out of a debt of 17 gazillion yen simply by printing 17 gazillion yen, but I'm not sure flooding the money supply like this would cause much less damage than an actual default (=the Japanese government telling its bondholders that it's not going to repay them).

You're not sure financial institutions would prefer being paid something rather than nothing. Could you please elaborate?

Re: Japan Falls into Recession

#109

Post by mc32 »

ekianjo wrote: post #106
mc32 wrote: post #102

Earlier quoted context omitted.

Integrating women into the workforce is a different issue. It would help to some degree --and the government is making a greater effort in having this happen. As paternalistic as Japan is, given the choice of making life easier for women to join the workforce or allow greater legal immigration in Japan, they have chosen to encourage women to stay in the workforce and to try to make it easier for them to succeed. As g…

> Japan has great productivity and has automated moreso than any other country --it's had to due to a retiring population. They need a younger population with disposable income who are willing to spend their disposable income. I'm sorry but the myth about Japan productivity has to stop :) I work in Japan and there are the most ineffective and honestly useless jobs out there. People guarding plastic cones on the road.…

Retirees working redundant jobs are not the issue. People staying in the office (twiddling thumbs) till the boss leaves is more of an issue.

Granted, construction is a big waste of money -but a lot of that is done by itinerant workers and pouring concrete over riverbeds and seashore is hardly useful endeavor, except to line the pockets of connected (all) politicians.

Re: Japan Falls into Recession

#110

Post by xorcist »

mc32 wrote: post #86
cturner wrote: post #79

Earlier quoted context omitted.

Why is this? Computers get rapidly cheaper for example.

I think because while average prices for individual devices go down, you make up for that with volume in an expanding market. Once you saturate the market, then you have to diversify, create new markets or consolidate (buy more market share).

A computer manufacturer doesn't need to increase their market share to keep the same profit when a process technology matures and therefore gets cheaper.

It is trivially possible to keep making money selling computers even if the total market share doesn't expand.

Post reply on HN