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Fiscal Sustainability under an Aging Population in Japan: A Financial Market Perspective


  • Takashi Oshio

    (Hitotsubashi University)

  • Oguro

    (Hosei University)


In this short paper, we investigate fiscal sustainability under an aging population in Japan from a financial market perspective. First, we focus on self-fulfilling expectations in the bond market and point out the risks of a fiscal collapse triggered by a change in market expectations. Second, we examine the extent to which market participants require the government to improve its fiscal position. Further, we discuss the possibility of lower economic growth accompanied with a high level of government debt, based on relationships observed across countries.

Suggested Citation

  • Takashi Oshio & Oguro, 2013. "Fiscal Sustainability under an Aging Population in Japan: A Financial Market Perspective," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 9(4), pages 735-750, September.
  • Handle: RePEc:mof:journl:ppr023g

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    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
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    Cited by:

    1. Shiro Armstrong & Tatsuyoshi Okimoto, 2016. "Fiscal Sustainability in Japan," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 3(2), pages 235-243, May.

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