Guest Lecture: The Collapse of the Growth Model and Fiscal Crisis - Rethinking State Capacity in Japan

We are pleased to invite you to a guest lecture “The Collapse of the Growth Model and Fiscal Crisis: Rethinking State Capacity in Japan” by Professor of Economic History and prolific publisher Toshiaki Tamaki, to be held on December 11, from 12:00 to 13:45, Jaakobi 2-109.

State capacity, defined as a state’s ability to raise revenue, manage expenditure, sustain debt, and adapt institutions, in this paper, has historically underpinned Japan’s modern fiscal system. For decades after the Second World War, this system functioned effectively on the assumption of continuous economic and population growth, as articulated in the Solow growth model. Expanding tax revenues and a high savings rate allowed the state to finance social security and maintain fiscal stability. However, this foundation is now eroding. A rapidly ageing and shrinking population is undermining the tax base, while social security spending has risen to nearly a quarter of GDP. Even if per capita income increases, overall revenues will continue to decline. The capacity to roll over government debt will weaken, potentially triggering a loss of market confidence and raising the risk of both soft and hard forms of default. Given the scale of Japan’s bond market and its global financial integration, such a fiscal crisis would not remain a domestic problem. The erosion of state capacity under demographic decline represents not a cyclical fluctuation but a structural transformation, with profound implications for both national fiscal policy and international financial stability.

The guest lecture will be held in a hybrid format. You can attend the class in Jakobi 2-109 or via Zoom.

Zoom link

Toshiaki Tamaki is a Professor of Economic History in the Faculty of Economics of Kyoto Sangyo University. He specialises in the history of the Baltic Region and the global economy. He received his PhD from Osaka University and MPhil and BA from Doshisha University. Professor Tamaki is a prolific publisher in Japan, where he has published a number of bestsellers in economic and global history fields. His latest monograph (in Japanese) is The Traders Who Created the World: The Mediterranean Economy and the Trade Diaspora (2022), and his recent articles include Mercantilism as State Policy and Merchant Activities: A Global Perspective” (in French) in P. Jarmouk eds: Between coasts: Seas, seafarers, merchants, Paris 2021. Professor Tamaki also has previous project management expertise and has successfully co-edited a number of international book projects, including Comparing Post-War Japanese and Finnish Economies and Societies (Routledge, 2015). His current work engages the topics of global finance hegemony and questions of the New Cold War.