In 1991, former MIT dean Lester Thurow wrote: “If one looks at the last 20 years, Japan would have to be considered the betting favorite to win the economy honors of owning the 21st century.”
It hasn’t, and it likely won’t. But 20 years ago, the view was nearly universal. Japan’s economy was breathtaking — rapid growth, innovation, and efficiency like no one had seen. From 1960 to 1990, real per-capital GDP grew by nearly 6%, double the rate of America’s.
But then it all stopped. […]
There are two key numbers to watch when looking at demographics: the percentage of the population that’s of working age (15-64), and the percent likely to be in retirement (over 65).
Though all countries age, within four decades the U.S. will likely have one of the lowest percentages of elderly citizens, and one of the highest rates of working-age bodies among large economies. China, meanwhile, will see its working-age population plunge and its elderly ranks soar — an echo of its one-child policy. Europe falls deeper into age-based stagnation. Alas, Japan becomes the global equivalent of Boca Raton.