Against such a backdrop, the Japanese economy achieved the best economic performance among major developed economies in terms of price and growth rate. This situation, albeit good in itself, fomented excessive optimism about Japan’s higher potential growth and, together with the influence of prolonged easy monetary policy, contributed to the creation of economic bubbles of unprecedented scale in the latter half of the 1980s.
In the 1990s, Japan suffered from deleveraging of excess debt, the aftermath of the bursting of the bubbles. And, since the early 2000s, the Japanese economy has gradually come to face a different issue from that in most of your countries. The challenge here is the rapid ageing of the population dragging down the potential growth rate.