This podcast episode explores the causes and consequences of Japan's lost decades, a period of economic stagnation that began in the early 1990s. It discusses the factors that led to Japan's economic downturn, including the collapse of the asset bubble, the banking crisis, and the government's response. It also examines the concept of a liquidity trap and how Japan's experience influenced the U.S. response to the 2008 financial crisis. Additionally, the episode delves into the supply-side challenges that have contributed to Japan's economic stagnation and the difficulties in addressing them. Overall, it highlights the importance of learning from Japan's experiences and finding innovative solutions to similar economic challenges faced by modern economies.
