With gross government debt surpassing 200% of GDP, Japan’s fiscal situation is in uncharted territory. In addition to robust nominal GDP growth, correcting two decades of budget deficits requires a large and sustained fiscal consolidation based on a detailed and credible multi-year plan that...

Income inequality and relative poverty among the working-age population in Japan have risen to levels above the OECD average. This trend is partially explained by labour market dualism, with an increasing proportion of non-regular workers who are paid significantly less than regular workers, as...

Labour productivity growth in the service sector, which accounts for 70% of Japan’s economic output and employment, has slowed markedly in recent years in contrast to manufacturing. The disappointing performance is associated with weak competition in the service sector resulting from strict...

The proportion of non-regular workers has risen to one-third of total employment. While non-regular employment provides flexibility and cost reductions for firms, it also creates equity and efficiency concerns. A comprehensive approach that includes relaxing the high degree of employment...

Increasing productivity growth through innovation is a key to raising living standards. Although R&D intensity in Japan is the third highest in the OECD area, the benefits do not appear to have been commensurate with the level of investment. The innovation system, which developed during the...

The crisis that originated in mid-2007 in the United States and deepened in September 2008 is the largest peace-time disruption of financial markets since the Great Depression. It was triggered by a number of factors, namely the large amount of lending to subprime borrowers, the expansion of...

The New Growth Strategy aims to create demand and jobs through regulatory reform and fiscal measures. The Strategy focuses on key challenges, notably climate change and population ageing, which can be turned into sources of growth. Given Japan’s precarious fiscal position, it is essential to...

While Japan has achieved outstanding scores on the PISA exams, further improving educational outcomes is important to sustain growth in the face of rapid population ageing. The government should step up investment in early childhood education and care and integrate childcare and kindergarten to...

The problems of Japanese agriculture – in particular low productivity and the prevalence of part-time farmers and small plots have been evident for the past 50 years. The high level and distortionary nature of agriculture support imposes burdens on consumers and taxpayers, undermines the...