For the record, the author of “Peak Japan” — me — gets no satisfaction from reports that Japan has been overtaken by Germany in global economic rankings. Japan’s slip to fourth place isn’t a geopolitical shift, but is merely a continuation of existing trajectories.
It does, however, contrast with some recent pronouncements about Japan and should remind us that national power is an elusive concept that defies simple characterization. As is so often the case with Japan, we see what we look for.
Germany’s eclipse of Japan as the world’s third largest economy was no surprise. (For the record, the U.S. is first and China second — at least when using conventional measures and more on that in a minute.) The International Monetary Fund forecast the shift last October, predicting that Japan’s nominal gross domestic product would decrease 0.2% from the previous year to $4.23 trillion (¥630 trillion), while Germany’s would increase 8.4% to $4.43 trillion.