In 2013, former Treasury Secretary Larry Summers popularized the term “secular stagnation” — a reference to a nation’s decline into permanently sluggish economic growth. Economists use the phrase interchangeably with “Japanification” — the process of a nation adopting the traits of Japan’s economy.
As former Cato Institute senior fellow Daniel Mitchell summarized, Japan merges “misguided entitlement programs that are found in most developed nations” and “a quadrupling of the debt burden” with “far-worse-than-usual demographics.” In other words, Japan’s economy is simultaneously limping along due to decades of Keynesian economic activism and a diminishing populace. Both phenomena inhibit the nation’s long-term economic expansion.
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