Fears that Japan’s government will soon be forced to declare a “technical recession” make a fine example of how useless the technical definition of a recession really is. Japan is suffering a slowdown but it has no house price bubble or credit crunch to deal with and its export markets in Asia are still growing. What the economy needs most is robust reforming policies from the government, not an ill-designed fiscal stimulus, or an excessive response to high inflation by the Bank of Japan.

The usual definition of a recession – two consecutive quarters of negative growth – matters little for two reasons. First, Japan’s notoriously volatile statistics recorded 4 per cent growth in the first quarter of 2008, so negative numbers in the second and third quarters are still compatible with a strong result for the year. Second, Japan’s stagnant population means its economy cannot grow as fast as others: recession is no worse for Japan than growth of below 1 per cent is for the US.