Between March 1991 — when a protracted recession started after the economic bubble burst — and fiscal 2012, Japan's economy averaged a dismal 0.9 percent in annual real growth while contracting 0.2 percent per year in nominal terms.

I would like to point to three major factors that I believe have led the Japanese economy to lose its growth potential.

The first one relates to domestic sales of automobiles. In the years following the 1973 oil crisis, many Western industrialized countries suffered a sharp slowdown in growth to below 3 percent. By contrast, Japan's economy expanded at a relatively high growth rate of 4.8 percent, largely because the domestic market for passenger vehicles was still expanding.