First, financial instability can materialise even with sound macroeconomic policies, as a result of factors such as inadequate supervision in emerging market economies and so-called “contagion”, ie the international transmission of instability. Second, a world divided into sovereign states has inevitably moved more rapidly towards full capital mobility than towards common rules.
The manufacturing industry, in particular, has seen existing jobs being replaced with machines and outsourcing to other countries, resulting in downward pressure on wages and lost job opportunities. However, there is a view that Japan's labor market as a whole has not undergone drastic changes. Our well-known system of life-time employment and seniority-based wages virtually continues to this day.