Former Federal Reserve Chairman Ben Bernanke referred to this as the "Great Moderation" and argued that a major reason was the dramatic improvement in the ability of central banks in those economies, including the United Kingdom, to stabilize inflation expectations through the introduction of measures such as inflation targeting. Meanwhile, Japan's economy found itself in a completely different situation.
Japan experienced a major asset bubble from the late 1980s to the early 1990s and, following the collapse of the asset bubble, suffered a sharp economic slowdown and serious financial instability. Moreover, firms had to deal with the so-called three excesses -excess production capacity, excess employment, and excess debt -- while financial institutions had to grapple with the nonperforming loan problem.