The Economic and Social Research Institute published "Economic Analysis No. 210 (Special Planning Issue) - Feature: Future Prospects Using New Long-term Projection Models" in July 2025, a collection of papers on the development and application of new models for analyzing ultra-long-term future prospects of the Japanese economy.
This issue features the results of new model development that enables ultra-long-term economic analysis, moving from conventional short- and medium-term analysis-focused models to address long-term challenges facing the Japanese economy including population decline, technological innovation, and climate change.
In this editorial foreword, Motoshi Shinya discusses the significance of new long-term projection models, emphasizing the necessity of policy analysis tools for achieving sustainable growth under population decline. The importance of two approaches is highlighted: DSGE models with endogenized technological growth and System Dynamics.
The foreword establishes the framework for understanding how demographic changes, technological progress, and institutional changes can be incorporated into long-term economic modeling. It emphasizes that traditional short- and medium-term focused models are insufficient for addressing the structural challenges Japan faces, requiring new methodological approaches that can capture complex interactions between economic variables over extended time horizons.
The editorial stresses the critical importance of developing analytical capabilities that can inform policy decisions for Japan's economic future, particularly in the context of an aging society and the need for technological innovation to maintain economic vitality.