The Japanese Economy

Randall S. Jones is a professional fellow at Columbia University’s Center on Japanese Economy and Business and a non-resident fellow at the Korea Economic Institute. Previously, he served as the Senior Counsellor for East Asia and as Head of the Japan/Korea Desk at the Organization for Economic Cooperation and Development (OECD) in Paris from 2002 until 2019.

The Author

Preface and Acknowledgements

Acronyms and Abbreviations






From the collapse of the bubble economy to the COVID-19 pandemic: an overview of the Japanese economy from 1990 to 2020



Key challenges facing Japan
Part I Labor market reform to sustain economic growth and promote social inclusion




Expanding the use of foreign workers and raising the fertility rate to cope with demographic challenges



Extending the careers of older persons



Promoting employment and leadership opportunities for women
Part II Raising productivity to sustain living standards in the face of a shrinking and aging population




Improving the innovation framework to boost productivity



Advancing the digitalization of Japan to raise productivity and well-being



Reforming the education system and increasing human capital



Strengthening the integration of Japan in the world economy to benefit more fully from globalization



Accelerating regulatory reform to strengthen competition and boost productivity



Upgrading corporate governance to revitalize the Japanese economy



Improving the insolvency regime to improve resource allocation



Making small and medium-sized enterprises a driver of growth and innovation
Part III Improving performance in key sectors




Enhancing productivity in the service sector



Upgrading productivity in the agricultural sector



Financial sector reforms to promote growth and financial stability
Part IV Macroeconomic policies to promote economic growth and fiscal sustainability




Improving the fiscal framework to ensure long-run fiscal sustainability



Providing universal high-quality healthcare while controlling spending



Consolidation of local government finances in tandem with the central government



Reforming Japan’s tax system



Monetary policy: unconventional measures to achieve the inflation target
Part V Enhancing well-being




Reducing income inequality and poverty to promote social inclusion



Reforming the energy sector to achieve green growth and stop climate change
Part VI Summary




Summary: addressing Japan’s economic and demographic challenges