The 1990s have become widely regarded as the "lost decade" for Japan's economy. Unfortunately, there is little indication for optimism about recovery during the first 10 years of the new millennium. That would mean a cycle of 20 mostly bad years.
Japan's low levels of consumption expenditures, lagging corporate investment and crippled financial system require further liquidation through bankruptcies and layoffs before there can be any hope for even a gradual recovery. Unless current leaders make bold moves to loosen the grip of the current deflationary recession, Japan may remember this era as one when a full generation lost hope.
Christopher Lingle is Global Strategist for eConoLytics.com.
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