NEW YORK ¨C Japan¡¯s economic and financial malaise once was thought to have little relevance for other advanced economies. Respected Western economists and policymakers even argued that ¡°Japan couldn¡¯t happen here.¡± But developments in recent years have led to a more humble attitude that recognizes the importance of understanding Japan¡¯s experience, past and present.
Here are five of the big insights:
It is not easy to decisively break out of a growth slump associated with the bursting of a financial bubble. The longer an economy is stuck in a low growth regime, the greater the structural headwinds impeding an economic liftoff. This affects not just the current growth trajectory, but future potential, too.
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