Japan to become a economic featherweight in 2050?

Today I stumbled over an article on the Japan blog of the WSJ. I am rather used to gloom and doom news about Japan, but the crescendo of the doomsayers was surprising, even to me.

The article refers to a paper of a japanese think-tank called " the 21st Century Public Policy Institute", which is connected to Japan’s main business lobby Keidanren.  Predictions by econonists and political scientist are always viewed by me with great suspicion (especially when payed by special interest groups) . What makes it even more vaxing is, that our dearly loved "scienitsts" trying to predict the state of the japaneses economy in 2050! That's a rather bold endeavour, to say the least, when one considers that those "scientists" usually don't even get a country's GDP numbers for the next quarter right.

Basically, this think tank is taking the already very well known challenges Japan is facing (shrinking workforce, high government debt, poor growth prospect), extrapolating those trends and predicting the most likely outcome for Japan's economy in 40 years.

I do faintly remember when extrapolating a trend was tried on Japan before. So what happend to Japan's world dominance, predicted by those think tanks in the late 80's, which should be upon us by now? I tell you. All there econometric models always underestimate the powerful forces of the good old reversion to the mean.

So what are they predicting now. Simply put, Japan will be economicaly marginalised and will not be part of the club of developed countries anymore by 2050! What a difference 20 years make.

http://blogs.wsj.com/japanrealtime/2012/04/24/japan-to-go-from-economic-heavyweight-to-featherweight-by-2050/

What a depressing start into the day. So you can imagine how surprised I was to find an article, that dares to contradict the chore of doomsayers on Japan. And again it's Eammon Fingleton. As I mentioned before, I don't agree with many of Fingleton's economic arguments regarding the state of Japan's economy. But I do like his boldness to swim against the tide and his common sense aproach to a complex topic.

http://www.forbes.com/sites/eamonnfingleton/2012/04/23/will-the-real-japan-please-stand-up-2/

It seems that, at least for now, Japan is still a heavyweight when it comes to bailing-out europe via the IMF.