The U.S. subprime mortgage crisis has roiled global financial markets and will continue to sway the world economy for several years to come. In the near future, even though the U.S. economy seems certain to decelerate, the world outlook is not necessarily grim under an optimistic scenario in which China and other emerging economies take up the slack. Over the next decade, as aging advances in industrialized economies, Japan’s potential growth rate will edge down, while real economic growth will average 1.7% per year. However, fiscal restructuring will necessitate consumption tax rate hikes, making the growth path somewhat lumpy.