ABSTRACT
The population base in Japan is rapidly growing older. This book examined the consequences of that aging on Japanese saving, investment, and budget balances. I have shown that immigration may help somewhat reduce the negative impact of aging on Japanese saving, and particularly on budget balances. A resumption of strong growth in real GDP would also reduce the need for spending and tax adjustments. If real interest rates are 3 percent, a real GDP growth rate of slightly in excess of 3 percent can imply falling debt-GDP ratios. An aging population does not necessarily mean that Japan will sink into international oblivion. Certainly, Japanese policymakers are aware not only of the problems associated with aging, but also of a slew of proposals to address the problems, both directly and indirectly, through removing the impediments to growth.
