With regard to well-founded pessimism, it is necessary to accurately recognize the essence of the underlying issues and squarely address them. At the same time, we cannot allow ourselves the luxury of indulging in groundless pessimism. It is important to calmly recognize the relative strengths of our country and utilize them to the maximum extent possible.
Earlier, I identified trends in the labor force and productivity growth as factors responsible for the decline in Japan’s growth potential since the 1990s. These trends in themselves are a fact. To provide some detail, while the average rate of change in the labor force declined over the past two decades, productivity growth plunged in the 1990s, but has recovered somewhat since 2000.