A more growth-friendly mix of government expenditures will thus be even more important for countries currently in this situation. Having said that, I would like to discuss two areas I think meet the criteria for government action: human capital accumulation and mitigating climate change. To begin with, investment in human capital is essential for future growth.
As I have repeatedly pointed out, Japan’s per capita growth is about the average among the G7 economies, and the growth of output per working age population is the highest in the G7.3 Compared with most developed economies, the increase in unemployment has been modest.