But their GDP hasn't been growing much either. They've been fighting deflation (or non-wage inflation) for a long long time.
I'm not sure a deflation is good for us.
I'm not sure a deflation is good for us.
It's obvious to the economic world. That's the reason BOJ keeps buying Japanese stocks and bonds (to keep asset prices high when others have stopped buying) and Japanese people have stopped investing in Nikkei (because holding cash == increasing value)
That's also the reason Japan (notoriously closed society) is admitting defeat and letting in immigrants to work.
Your comment also doesn’t link the deficit to the deflation, only speculates on the effects of and policy response to that deflation.
You need to understand the sequence of events in Japan. They had a massive debt problem (national, local and corporate). That triggered a recession causing asset prices to drop. The caused deflation.
The only way to not have asset prices drop and some inflation was printing money. So they printed. Their population and economic investment dropped further while they kept printing money (two opposite pulls). This kept them going until today. It's a wonder they didn't hyperinflate. They pulled it off. But the expense of this is no GDP growth. Infact, whatever GDP growth they have is because of BOJ selling assets to BOJ who sells assets to BOJ. It's a mirage.
So, yeah, their real economic activity (thus, investments, wages, innovation) has dropped from zero to negative because for the average individual, holding money = gold!