The lost decade

The most famous lost decade occurred in Japan in the 1990s. From 1992 through 1999, the Japanese economy grew by less than 1% a year. It has yet to fully recover from the economic weakness and falling prices it suffered during that period.

There are a number of similarities between conditions in Japan in the 1990’s and the United States today. Japan had a real estate bubble inflate and then burst, resulting in banks choked with bad loans on their balance sheets and a cutback in lending…

Sohn puts the chance of a prolonged period of weak growth as high as 40%, with the chance of a double dip only 20%-25%.

“If I had a choice I would much rather have a double dip and be done with it. A lost decade is much more dangerous, economically, socially and politically,” said Sohn.