By Michael Pettis (Guest Post)
In the past two years a lot of analysts have been warning that the US and/or Europe are about to turn “Japanese”. By this I guess they mean that very high levels of debt are going to set the stage for one or two decades of economic stagnation and zero growth. I am not sure I agree. I think these kinds of comparisons seriously miss the point about what went wrong in Japan in the 1980s. Except at a very superficial levels Japan’s imbalances before 1990 were very different from the imbalances from which Europe and the US suffer today, and the resolutions in each case…
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