From Japan’s Slump in 1990s, Lessons for U.S.

I don't think the US will follow Japan's route of a very long and painful recession, but it is interesting to learn from possible parrallels.

Check out the NYTimes article



Japan's economic expansion after WW2 was seen as a model. In the 80s, Japan was at the centre of a real-estate boom summarized by this funny fact: "by 1989, the value world investors placed on the land on which the Imperial Palace resides was said to be equal to the value of all the real-estate in California!" as reported by Fed Chairman Greenspan in his book The Age of Turbulence. Japan banks became heavily invested in loans backed by real estate as collateral. Then came a stock-market and real-estate crash. When house prices started to plunge, the banks should have called the loans, but, for fear of losing face, the bankers restrained from doing it. It subsequently took years - 15 years of economic stagnation from 1990 to 2005 - and many governments bailouts before real estate prices stabilized and the banking system returned to normal lending.

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