Few observers were surprised — or troubled — when Germany overtook Japan earlier this year as the world’s third-largest economy.
The International Monetary Fund predicted the change in October last year and anticipates that Japan will slip still further, with India taking the No. 4 slot in 2025.
Economists generally attributed the shift to exchange rate fluctuations between the yen and the euro. Some saw deeper forces at work: aging populations, limited natural resources and rising competition for Japanese exports. For me, the change in ranking validated the argument of “Peak Japan” that we are witnessing the apex of Japanese power.
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