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Opinion
Noah Smith

Old Age Is the Next Global Economic Threat

Japan's deflation is a warning to other countries with swelling elderly populations.

Aging populations are a threat to global economies. Just ask Japan.

Aging populations are a threat to global economies. Just ask Japan.

Source: Bloomberg

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While the world wrestles with a deadly pandemic and how to confront climate change, there’s another, long-term global challenge that no one really knows how to deal with: population aging. As the human race transitions from a burgeoning, exploding species to a static or shrinking one, economies around the world will come under significant strain.

Japan is the canary in the coal mine here. Although its birth rate is not as low as that of many other rich countries, it's been low for a longer time. That’s why Japan is now the world’s oldest major economy: