The chief economist of the Organization for Economic Cooperation and Development, Rintaro Tamaki, recently gave a talk that should be heard by all Japanese economists and policy makers. He observed that the aim of Japanese economic policy is still mainly about strengthening growth. However, in Europe, the more recent trends in policy strive for reducing inequality.
In his speech, delivered in Tokyo in July and based on a report considering the future of OECD and global economic development, Tamaki noted that the growth rate of emerging economies will gradually come down to that of advanced economies in coming years. For all developed countries, Japan included, there is a limit to expanding growth, most of which has been reached already.
That means the income inequality that inevitably results from the constant push for growth will in the long run be more destabilizing to the economy than helpful. As the OECD economists understand, efforts to reduce income inequality will have more positive long-term effects on stabilizing the economy. European countries already realize this and are implementing efforts to reduce inequality. Japan is not doing much in this regard.