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Shrinking population Economics : Lessons from Japan
japan's population has been aging for years. And now it is shrinking. Policy makers and corporate planners are understandably con- cerned. A smaller and older workforce will mean a decline in productive potential. Fewer consumers will mean less demand overall, and grayer shoppers will mean profound change in patterns of demand. Declining tax revenues will starve already-strapped municipalities. Regions and industries accustomed to subsist- ing on public-works spending will lose their traditional grubstakes. Japan's pension and health insurance programs will become unviable.
Although the demographic writing has been on Japan's walls for decades, Japanese have been largely oblivious to the impending change. The nation is utterly unprepared for the increasingly conspicuous implications of population shrinkage and aging. Government, business, academia, and the mass media are rushing to come to terms with the new demo- graphic realities. Their haste is all too evident in a flurry of unfounded pronouncements and half-baked theories about Japan's social and economic prospects. The tone of the discourse is distinctly gloomy.
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