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mbesto

> For those saying the Fed is running out of ammunition, study what the Bank of Japan has done.

Oh you mean the economy that has been stagnate for 20 years?

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GDP per capita doesn't look stagnant: https://tradingeconomics.com/japan/gdp-per-capita

This is about 1.2% annual growth fro 2010 to 2018.

Over that time, the population has also shrunk from 128 million to 126.3 million [1], so the per capita isn't as relevant. Japan's total GDP has pretty stagnant since 1995 [2].

[1] https://tradingeconomics.com/japan/population [2] https://tradingeconomics.com/japan/gdp

Capita is decreasing thanks to demographic trends, and gdp had flat lined

The US is also moving into a demographic downturn, thanks to republican policies.

Not really. The entire first world is suffering a demographic crisis but the US is doing slightly better than Europe and Japan with population set to keep increasing for the foreseeable future.

The population is only increasing due to an immigration flow that the Trump administration is busily shutting off or disincentivising in every way possible.

> The US is also moving into a demographic downturn, thanks to republican policies.

Please don't post partisan political comments without a source.

Edit: I appreciate the downvotes for kindly asking people to follow HackerNews' guidelines

Since when are sources required for basic observations on reality? Thanks to Republican opposition to providing first-world amenities to U.S. citizens (universal health care access, education access, childcare access, etc.) new generations of Americans are finding it increasingly difficult to start families. The evidence for this is multitudinous and moments away via any search engine...

Well, for starters it is against this site's guidelines

> Please don't use Hacker News for political or ideological battle. That destroys the curiosity this site exists for.

Fertility rates are equally low in other developed countries that offer universal healthcare, subsidized childcare, etc.

https://ourworldindata.org/fertility-rate

I plugged in Denmark and Portugal, and both show lower fertility rates than the US.

The unstated conclusion of your response seems to be that the absence of basic social service rights has no impact on rate of demographic change in developed countries; however, your comment appears to be focused on current measurements, and not rate of change. Keep in mind that the average American's economic position has been degrading for decades now, while the same cannot be said (to the same extent) for the citizens of the European countries you mentioned. Your source only has data through the year 2015, so I have supplemented it with projection data for the year 2020 from the CIA World Factbook [1] to more clearly illustrate the trend; the earlier date for each example I cite below is sourced from your link [2]. I've also included data for several other major countries (and the EU as a whole) that offer basic social safety rights to their citizens.

The USA fertility rate in 1990 was 1.98; in 2020 it is projected to be 1.84 (a delta of -.14).

The fertility rate in Denmark in 1990 was 1.65; in 2020 it is projected to be 1.78 (a delta of +.13).

The fertility rate in Portugal in 1990 was 1.52; in 2020 it is projected to be 1.41 (a delta of -.11).

The fertility rate in Germany in 1990 was 1.36; in 2020 it is projected to be 1.47 (a delta of +.11).

The fertility rate in Canada in 1990 was 1.66; in 2020 it is projected to be 1.57 (a delta of -.09).

The fertility rate in France in 1990 was 1.75; in 2020 it is projected to be 2.06 (a delta of +.31).

The fertility rate in Norway in 1990 was 1.85; in 2020 it is projected to be 1.84 (a delta of -.01).

The fertility rate for Europe in total in 1990 was 1.70; in 2020 it is projected to be 1.62 (a delta of -.08).

This is obviously not a thorough (or even statistical) analysis of the situation, but a cursory look at the data from the perspective of multi-decade trends does not lend credence to the notion that the availability of social safety nets has no impact on demographic rate of change in a developed country.

[1] https://www.cia.gov/library/publications/the-world-factbook/...

[2] https://ourworldindata.org/fertility-rate#the-global-decline...

Data shows [1] educated, empowered women with access to contraceptives have less children overall, and defer having children until later in life, full stop.

I also argue it is a net positive, regardless of the underlying mechanism(s), that the fertility rate is declining across the world considering the unsustainable consumption rate per capita of the first world.

[1] https://ourworldindata.org/fertility-rate#empowerment-of-wom...

This is a good point. A lower fertility rate will probably result in a better quality of life for people in the long run since there is less competition for resources

I agree with those points but I have not seen evidence for the idea that the availability of social safety nets is not also a significant factor in fertility rate trend, which I took to be the thrust of your original post.

Conversely, I haven't seen evidence that the availability of social safety nets is a significant factor. More data is required, but I still believe my theory is on sound footing based on existing fertility data.

You didn't state a theory; to the extent that you implied a theory similar to the one I described the available data does not support it at all...

I am fine with this. Bernie Sanders once said mass immigration was a "koch brothers scheme." I agree with this sentiment. Increases in GDP don't seem to help the lower class. As GDP has risen, inflation adjusted income has flatlined. As population has increased, and as housing investment gone higher, housing prices have skyrocketed.

I think you are confusing Sanders position against fully open borders vs an allowed, but controlled immigration process.

Allowed but controlled immigration is what I believe the result of Republican efforts has been. Sure, they probably want to decrease immigration even further, but they haven't gotten policy that far yet.

Looks like the population of Japan is falling faster than the GDP of Japan. So "per capita" is kinda misleading here.

I think GDP is pretty much meaningless and GDP per capita is a much more useful statistic.

These things are coupled, if GDP/capita is going up it means individuals are producing more. If this were just declining populations then per capita measures would be flat.

That's probably much more to do with their population pyramid than their monetary policy...they are a rapidly aging, insular society. If your working age population is decreasing, it's going to be nearly impossible to grow your economic output, especially when you turn away all immigrants.

If I were a Japanese retail investor in 1990 in his 30s, what would have been the best strategy? Just stay out of domestic markets and focus on areas with potential for growth?

> what would have been the best strategy?

Put your money into the USA.

Buy as many levered Japanese Government Bonds (JGBS) as possible!

0.67 Sharpe Ratio from government bonds in local currency from 1990 to 2000.

Stagnant or not the real question is what would have happened if the bank wasn't holding all those stocks? That is did buying all those stocks/ETFs successfully prop up the economy that would have otherwise gone into a recession or worse or did it cause the stagnation?

The argument could (and should more often) be made that recessions are sometimes healthy and that propping up failed or stagnant businesses or industries usually only prolongs the suffering. It also locks up resources that could be invested elsewhere in less entrenched but more promising new growth areas. So I would argue that it is likely to cause the stagnation

To use an analogy from botany, its like how certain types of plants need periods of dormancy, but its actually possible to create or install a given plant into specific environmental conditions where the inducement of dormancy is prevented, for a time... But overtime, without the time to rest and regenerate, the plant will become incredibly weak. It will stop flowering or producing delicious fruit. It will grow frail and live to only a fraction of its potential age limit. Similar to this are how efforts to reduce the spread of wildfires only ends up with a far more dangerous and uncontrollable situation down the road and the 'debt' of uncleared deadwood piles up.

Just a thought.

From a purely macroeconomic sense you're probably right but if we zoom in there's huge amounts of pain that don't go away when the economy turns around. People get worse educations because they can't afford to go to college/university or get sick and can't get treatment and wind up with long term health problems. [0] It's a problem that shows up everywhere in trying to discuss and measure how well the economy is doing, the top level numbers keep going up but it doesn't translate to the kind of generational improvements in wages or standards of living we used to see.

[0] Admittedly this is more of a problem in places without a national health service like the US.

This is a very good and thought-out comment - I don't understand why it was marked as dead.

Better than the hyper growth and subsequent pop they went through in the 80s and 90s

That's just how it is with democracy. You can either be the politician who didn't really do anything for the economy, or you can be the politician who plunged the country into a recession.

Nobody wants to rip off the band-aid, even if it's infected underneath.

Bingo. We have a winner.

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