chapter  2
20 Pages

The world in balance sheet recession: causes, cures and politics


A recurring concern in the Western economies today is that they may be headed toward a Japan-like lost decade. Remarkable similarities between house price movements in the United States this time and in Japan 15 years ago, illustrated in Figure 2.1, suggest that the two countries have indeed contracted a similar disease. The post-1990 Japanese experience, however, also demonstrated that the nation’s recession was no ordinary recession.