With the burst of the ‘bubble economy’, Japan’s economic miracle was gone. Nevertheless, the low growth era, often referred to as the ‘lost decades’, continued to attract attention. The ‘balance sheet recession’ culminating in Japan’s banking crises inspired macro-economic discourses, as did deflation, which the Bank of Japan started to fight with an ever-expansionary monetary policy. The government sector piled up record high debt absorbing the huge saving surpluses of the private corporate sector. Despite a highly educated workforce and top technology, productivity has remained surprisingly low. In the face of an ageing and declining population, the Japanese government recently aimed to stimulate productivity growth with corporate governance and ‘work-style’ reforms.