A “lost decade” is a memorable and captivating phrase, although not to my liking for the reasons I will discuss later. In fact, the background of Japan’s economic slump during the 1990s was intensely debated in and outside Japan. In those discussions, Japan’s “lost decade” was often considered as uniquely Japanese.
But when it comes to falling economic activity and a weakening financial system, there are amazing similarities between Japan’s experience in the 1990s and what the US has been through since the summer of 2007. And this leads some to argue that the US might be entering its own version of the “lost…not necessarily decade but something else”.