This will cause all sorts of problems. A shrinking population is also an aging one — a smaller base of workers supporting a larger number of retirees means lower living standards for everyone. An older population also tends to be less productive. Additionally, a shrinking population means a shrinking domestic market, decreasing the incentive for companies to invest in the country. It could also reduce the natural rate of interest, forcing the Bank of Japan to keep quantitative easing running forever in order to keep the country out of a liquidity trap. And it will certainly reduce Japan’s power and importance in the world.





So there are many reasons to want to stabilize the Japanese population. There are two ways to do this: immigration and higher fertility. Under Prime Minister Shinzo Abe, Japan has been admitting a lot more immigrants:



