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.
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.