U.S. and Japan as economic exemplars

Attended the U.S.-Japan economic relationship conference at the Carnegie Endowment today in Washington. The discussion was so lively that it went straight through ending nearly an hour overtime. Some highlights:

On the first panel Tadakatsu Sano, former METI vice minister, noted this paradox: Japan's declining population will require greater innovation to maintain economic growth, but innovation becomes more difficult in a backdrop of declining population and growth.

Sano also noted that while the glue that holds together the United States and Japan is shared values, the private sector is driving the formation of values and norms through supply chain management. He continued that governments usually follow industry in this area. European companies create standards with letters of inquiry to suppliers.

Oakley Johnson of AIG said that the United States and Japan, as the world's two largest economies, are the only countries that can lead the way on global issues and make a difference. He continued that a US-Japan economic partnership could remove economic nationalism in the relationship.