Simon Kuznets, the Nobel laureate known for his work on standardising the measurement of gross national product, used to group economies into four broad categories: under-developed, developed, Argentina and Japan.
From the 1960s, Japan’s extraordinary growth appeared so unique to Kuznets that it warranted its own category. But, starting in the late 1990s, Japan became an outlier in another way: it was the only advanced economy in the world where inflation, interest rates and wage growth all remained near zero — or in some cases below it.
Now, Japan’s central bankers and government officials say the country is at a historic inflection point and may finally become a “normal” economy. Companies will be able to pass on increased costs to consumers in the form of higher prices, and workers will respond by demanding better pay.