Economics & Finance / Macroeconomics / Fiscal Policy & Government Spending

Japan's 219% GDP Debt: Why It Hasn't Collapsed Yet?

Charles Y. Horioka; Takaaki Nomoto; Akiko Terada-Hagiwara

Japan's government debt is the highest in the developed world, at 219% of GDP in 2012. Yet, unlike Greece or Italy, it hasn't triggered a crisis. Why? This video, based on a 2013 NBER paper by Charles Y. Horioka, Takaaki Nomoto, and Akiko Terada-Hagiwara, breaks down the surprising reasons: massive domestic savings, a strong 'home bias' among Japanese investors, and a temporary 'safe-haven' effect post-2008 that attracted foreign capital. But here's the catch: with an aging population draining savings and global investors losing interest, Japan's debt game is running out of time. Watch to understand the ticking time bomb behind the world's most indebted economy.