Thursday, August 21, 2008

Lessons from a "Lost Decade"

There's a great article in this week's The Economist drawing similarities between America's crisis and the Japan's experience with 10 years of stagnation.
By learning from Japan’s mistakes, America can avoid a dismal decade. However, it would be arrogant for those in Washington, DC, to assume that Japan’s troubles simply reflected its macroeconomic incompetence. Experience in other countries shows that serious asset-price busts often lead to economic downturns lasting several years. Only a wild optimist would believe that the worst is over in America.

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