Japan shows us how to kill an economy

The 1.7 percent dip in gross domestic product for the second quarter or a 6.8 percent
contraction at an annualized rate -- gave the clearest picture yet of the impact of the levy rise.

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Following the financial crisis of the early 1990s, Japan followed a fiscal strategy that included extensive stimulus, bailouts and near zero interest rates. It resulted in the so-called Lost Decade that has since become the Lost Quarter Century.

(08-14-2014 09:05 AM)QuestionSocratic Wrote:  Following the financial crisis of the early 1990s, Japan followed a fiscal strategy that included extensive stimulus, bailouts and near zero interest rates. It resulted in the so-called Lost Decade that has since become the Lost Quarter Century.

Don't forget the quantitative easing strategy, that the Japanese invented. The US followed the EXACT same strategy in 2008 and has led to our own lost decade. Who would have seen that coming?

Duh. This ain't rocket science, folks.

The really amazing thing to me is that even Keynes said you could reach a point where Keynesian stimulus wouldn't work.
That's one big difference between Keynes and neo-Keynesians. The neo-Keynesians think you can just stimulate forever.

I've been saying for years that Keynes was right, there was a point where Keynesian stimulus wouldn't work, and we were at that point, and using Japan as an example.
The weak recovery is a sign that we're there, and it ain't working.

(08-14-2014 09:08 AM)EverRespect Wrote:  

(08-14-2014 09:05 AM)QuestionSocratic Wrote:  Following the financial crisis of the early 1990s, Japan followed a fiscal strategy that included extensive stimulus, bailouts and near zero interest rates. It resulted in the so-called Lost Decade that has since become the Lost Quarter Century.

Don't forget the quantitative easing strategy, that the Japanese invented. The US followed the EXACT same strategy in 2008 and has led to our own lost decade. Who would have seen that coming?

Apparently not Paul Krugman.

When money really does grow on trees.

So, they are in the lost how many years now?

(08-14-2014 08:04 PM)HeartOfDixie Wrote:  So, they are in the lost how many years now?

About 25 years. I know the term "lost generation" gets thrown around a lot, but it really fits on this case.

I'm not sure I'd say 25 years? I would have guessed about 15 or so now? Right after their real-estate boom fell through? Wasn't it 1989 when that and their stock market nose-dived? And I dont' think they ever really recovered from that.

(08-15-2014 08:45 AM)DaSaintFan Wrote:  I'm not sure I'd say 25 years? I would have guessed about 15 or so now? Right after their real-estate boom fell through? Wasn't it 1989 when that and their stock market nose-dived? And I dont' think they ever really recovered from that.

Yes. 1989 is 25 yrs. ago.

Or maybe you're agreeing with me, not sure

oops.. duh.. i can't do math :)