Under normal circumstances, most people believe that saving is positive. However, high rates of savings can also mean low levels of consumption (spending), and this can hamper economic growth. In this video lecture, Kyoji Fukao, Professor of Macroeconomics and Productivity at Hitotsubashi University, explains how Japan’s high savings rate contributed to its economic stagnation.
The accompanying discussion guide will provide a framework for students to understand the macroeconomics behind Japan’s economic stagnation. Students will also learn the components of economic growth, the impact of inflation and deflation on spending and savings, and explore how Japan might address insufficient consumer demand.