Sunday, September 8, 2013

Japan's growth rate recently

I have no clue at the moment, numbers appear all over the map. Trading economics has real growth around. 8% for most of 2013, but I hear reports that this will be revised upward, and current growth is around 3%, expected to go up to 4.5%. None of the numbers seem consistent to me! I still look for some sanity in it.

I myself figured a 3% productivity growth was doable considering Japan's expertise in energy efficiency. Maybe this all comes together soon.

The risk? The Japanese have been through this many times and they know a wage cut has arrived so consumer purchases will decline. The key to success is that gains from lower cost wages are greater than losses from more costly inputs. The part I don't get  is the fiscal expansion part.  Why does government compete for inputs with the export sector? This is all about export margins, and I suspect exporters will force government to curtail its expansion plans.

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