Many elements of Japan's economic stagnation the 1990s are reasonably well explained a modern, 'synthesis type', new-Keynesian model. The actual occurrence of some of the elements, such as deflation and zero interest rates, was, however, rare contemporary experience. As a result there has been a disconnect between what is theoretically understood by economists and the public discourse about Japan's 'lost decades'. The implications for policy are not very controversial theory - fiscal policy...[Show more]
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