Japan's Bubble, Deflation, and Long-term Stagnation

Japan's economic bubble burst in the early 1990's, and the country entered its famous "lost decade" ua period of stagnation and economic disruption that persisted until 2003. The current declines in global equity and real estate markets have eerie parallels to Japan's economic woes of the 1990s. If we are to avoid repeating Japan's experience on a global scale, we must understand what happened, why it happened, and the effectiveness (or ineffectiveness) of Japan's policy choices. In this volume, prominent economistsuJapan specialists and othersubring state-of-the-art models and analytic tools to bear on these questions.

The essays generate new facts and new findings about Japan's lost decade. As much of the research shows, the slowdown can be broken down into two phases: a typical recession, followed by a breakdown in the economy likely due to insufficient restructuring, which is not well described by conventional models. The contributors offer forceful arguments showing that Japan's experience, and the unconventionalusometimes unsuccessfulumeasures adopted by Japan's government and central bank, offer valuable lessons for our post-boom world.

Koichi Hamada is Tuntex Professor of Economics at Yale University and the author of The Political Economy of International Monetary Interdependence (MIT Press, 1985).

Anil K. Kashyap is Edward Eagle Brown Professor of Economics and Finance and Richard N. Rosett Faculty Fellow at the University of Chicago Booth School of Business. He is the coauthor of Corporate Financing and Governance in Japan: The Road to the Future (MIT Press, 2001).

David E. Weinstein is Carl S. Shoup Professor of the Japanese Economy at Columbia University and the coeditor of Reviving Japan's Economy: Problems and Prescriptions (MIT Press, 2005).

Anil K Kashyap is Edward Eagle Brown Professor of Economics and Finance and Richard N. Rossett Faculty Fellow at the University of Chicago Booth School of Business. He is the coauthor of Corporate Financing and Governance in Japan: The Road to the Future (MIT Press, 2001). Koichi Hamada is Tuntex Professor of Economics at Yale University and the auhor of The Political Economy of International Monetary Interdependence (MIT Press, 1985). David E. Weinstein is Carl S. Shoup Professor of the Japanese Economy at Columbia University and the coeditor of Reviving Japan's Economy: Problems and Prescriptions (MIT Press, 2005).