The Japanese bubble: Alarming parallels with U.S.
By Steve Lohr
Published: February 8, 2008
In broad strokes, the parallels are alarming. After a long boom, the Japanese economy in the 1990s, as America's today, was jolted by a sharp plunge in the real estate market. In Tokyo, the government, bankers, and policy makers were slow to recognize the scope of the problem. Bad loans piled up. The financial troubles rippled through the economy, as consumer spending and job growth fell.
The Japanese slump proved extraordinarily long-lived, ending only a few years ago, a stretch of stagnation known as Japan's "lost decade." It was a humbling and lasting setback for a country once feared and admired as a model of economic dynamism.
The shadow of Japan hangs over the U.S. economy these days. The United States is sliding into a downturn, economists said, just as it appears to be losing some of its global edge from the productivity-enhancing gains driven by technology investments of recent decades.
In Japan, experts point out, the housing bubble burst just as the rise of China as an export power hurt Japanese manufacturers.
More: http://www.iht.com/articles/2008/02/08/business/yen.php?page=1
By Steve Lohr
Published: February 8, 2008
In broad strokes, the parallels are alarming. After a long boom, the Japanese economy in the 1990s, as America's today, was jolted by a sharp plunge in the real estate market. In Tokyo, the government, bankers, and policy makers were slow to recognize the scope of the problem. Bad loans piled up. The financial troubles rippled through the economy, as consumer spending and job growth fell.
The Japanese slump proved extraordinarily long-lived, ending only a few years ago, a stretch of stagnation known as Japan's "lost decade." It was a humbling and lasting setback for a country once feared and admired as a model of economic dynamism.
The shadow of Japan hangs over the U.S. economy these days. The United States is sliding into a downturn, economists said, just as it appears to be losing some of its global edge from the productivity-enhancing gains driven by technology investments of recent decades.
In Japan, experts point out, the housing bubble burst just as the rise of China as an export power hurt Japanese manufacturers.
More: http://www.iht.com/articles/2008/02/08/business/yen.php?page=1
