[Krugman Professor Breaks the Conventional Wisdom] The actual Japan GDP grows at a rate comparable to the United States!

Hello, this is Kashiyama.



How does Japan's economy

rank in the world?



To measure that, one indicator is

“GDP per capita” which is often used.



What is the productivity per Japanese person? This indicator shows that,

but as for the data,



according to 2018 data,

『Japan’s GDP per capita』 ranks 26th in the world.

(Based on IMF statistics

https://www.imf.org/external/datamapper/NGDPDPC@WEO/OEMDC/ADVEC/WEOWORLD)



Exactly 30 years ago, in 1988,

Japan’s ‘GDP per capita’ was 2nd in the world.



It has fallen a long way, hasn’t it.



In response to the 26th place, many alarmist articles appeared.

There are many worrying pieces about





rising social security costs and consumption tax, and moreover

per-capita productivity being low,

which makes it natural to feel no hope for Japan’s future.



But, there are many ways to view the data.



Just by changing the angle a little, you can see an entirely different picture.



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Krugman: Busting conventional wisdom

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For example, recently, Paul Krugman

who challenged the negative view of Japan’s GDP,

is a renowned American economist who won the Nobel Prize in Economics in 2008.



On January 10 this year, he tweeted the following.











"But Japan's aging population means that

you really want to look at GDP per working-age adult.

And by that measure

Japan's growth has been

essentially the same as America's"

（Sourcehttps://twitter.com/paulkrugman）




“When looking at GDP per worker,

Japan and the United States have not diverged in GDP growth.”

This is the idea.



If you talk in terms of GDP per capita, Japan sits at 26th,

but in terms of GDP per worker,

the growth is on par with the U.S., meaning that.



Think about it: GDP per capita, which includes those not working, is less realistic than GDP per worker, which is more representative of actual labor output.







And in terms of GDP per worker, Japan has shown growth comparable to the United States,

where stock prices have reached record highs.

This means a comparable level of growth to America.



Also, Krugman says

"The Japanese have also avoided mass unemployment,

and they're doing a much better job

than we are of not dying"

as well,



and points to Japan’s low unemployment rate.



In the midst of much negative talk about the economy,

this viewpoint gives the Japanese people a sense of hope.



“Isn’t Japan not as bad as people say?”

you might start to think.



And from this, I want to tell you:

the importance of looking at things from multiple perspectives.



Looking at things from many angles is not easy.



For example,

when IMF says 'Japan’s GDP per capita was 26th in the world'

,



at that moment,

many people stop there and don’t think beyond it.





However, instead of taking the data at face value,

it's important to rethink with another perspective,



like saying “no, but…”.



Especially in stock trading, how you interpret numbers can

lead to huge profits or losses.





Therefore, if you are involved in stock trading,

make sure to engage with data carefully.



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Smart people are often the most dangerous

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Also, more than that,

the smarter you are, the more you should be careful.



“People who are intelligent and smart tend to grasp reality more accurately,”

is what one might think, but



in reality, the more intelligent people are,

the more prone they are to a trap,

which is known.



I’ll share a paragraph that shows this.

↓

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From these research results,

the notion that “self-centered reasoning is a trait of unintelligent people”

is shown to be incorrect.

On the contrary, people with high cognitive abilities

tend to rationalize information and interpret it to suit their needs,

and, by extension, skillfully distort data to fit their own views.


Tarli Charlotte
‘Why Facts Don’t Change Our Minds (Shiraikyo Publishing)’,
Aug 30, 2019, First Edition, First Printing
p.32

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In other words, the smarter someone is, the more they distort reality

to create a favorable world for themselves.





What about you?



If you think, “I’m smart,” you may be rare, but

at the very least



you probably think, “my intelligence is not below average.”





Most people consider themselves

“smarter than average.”

So, please, don’t let your intelligence make you arrogant.











To avoid creating a favorable world for yourself,



listening to others is an effective method.



Sometimes, other people’s values can appropriately challenge your own.





By the way, if you’re into stock trading,

do you have someone you can freely talk about trading with?





If you’re a regular office worker, you might not easily talk about stock trading with your colleagues,

but consider finding trading partners outside work.



Create trading friends who can gently shake up your values.



And with that, please see this to the end today.





Thank you for watching.



Keizo Shimoyama