[dev_jim]

I don't see why he keeps trotting out this thesis that just isn't supported by data. Japan's GDP has been stagnant over the past two decades:

https://www.google.com/search?q=japan+GDP

Adjusting for working age population shows a similar trend. And if data doesn't work for you then there's a ton of other signs that the economy is not doing well:

- Interest rates have been stuck against the zero lower bound

- Stock market is 1/4 of what it was at it's peak

- Property values have still not recovered in major cities

- Debt as a percentage of GDP has ballooned to over 200%

Now with that being said - if I had to choose a country to spend two lost decades in, it would be Japan. Local savers have allowed them to issue debt at very low interest rates which has been able to cover shortfalls. And there is signs that Abenomics is taking hold.

[wjnc]

TL/DR: Worker productivity in Japan is high and has risen like all other western countries. Other factors, like lacklustre respons to zombie banks, must explain "lost decade".

I look at the Penn World Table.

In: * Real Income per Population, * Real Income per Employed Population, and * Real Income per Employed Work Hour

Japan has lagged the USA pretty consistently. That is consistent with all other major economic countries. In the '90s Japan actually outperformed on the Income per Worked Hour.

That means there are still 99 problems left for the Japanse economy, but worker productivity ain't one.

Still zombie banks and government reponse to zombie banks might have created a consumption crisis (just as, for example in the Netherlands at this moment, consumers must pay for increasing bank buffers), but I would venture that corporations have retained profitability through the crisis.

Japan didn't grow compared to it's neighbours. But that's catch-up growth for Korea and China. You can't blame Japan for already being first-world in 1990.

Stock market isn't a good indicator for welfare of general population. Japan just might have been overvalued, or other countries overvalued. Property markets have gone beserk pretty much first worldwide, only in Japan first. Another pointer that we are just mimicing their banking crisis.

[rsync]

Also, he mentions (low) cost of borrowing as a key point to his thesis, but my understanding is that the cost of borrowing for Japan is heavily influenced by domestic savings.

IIRC, a lot of the money "borrowed" are the contents of the postal savings accounts (or whatever they are) of elderly Japanese who are extremely conservative investors. I have further seen it commented that there will be complications when that sect of the population switches to net withdrawls as they near end of life or pass on inheritance, etc.

[kaonashi]

> Private sector financial assets as a percentage of GDP have ballooned to over 200%.

Doesn't sound so bad when you phrase it that way.