Better Economic Policy Won't Save Japan

Japan's vanishing growth.

Photographer: Kiyoshi Ota/Bloomberg

When I was a wee thing, just a slip of a girl launching herself into the mad and exciting world of economic policy reporting, you used to hear a lot of talk about Japan's Lost Decade.  From World War II to about 1990, Japan posted the most miraculous economic transformation of the 20th century.  Self-flagellating magazine articles and paranoid novels were written by anxious Americans who saw--all too clearly!--that Japan's mighty economic engine would soon overpower lazy, atomistic Americans, forcing us into a sort of well-transistorized serfdom.  Then the Nikkei crashed and the mighty engine stalled*.   And unlike your Camry, it proved difficult to repair.  Japan alternated between stagnation and recession for the better part of a decade.  Then longer.  Eventually, the "Lost Decade" stretched past 20 years.  It is now approaching the quarter-century mark.

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