What is it about?

The Japanese economy has been mired in subdued growth and deflation for more than two decades. This paper describes the key economic facts and features of Japan’s decades of stagnation.

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Why is it important?

The paper discusses why long- term Japanese government bonds’ nominal yields have stayed very low in spite of elevated government debt ratios and chronic fiscal deficits. It also provides a brief overview of Abenomics and subsequent economic developments in Japan.


Japan’s experience in the past two decades shows that easy monetary policy without effective fiscal policy and structural reforms to raise productivity and increase real wages does not end deflation. However, if Japanese policymakers adopt appropriate policies, the country can overcome its current economic stagnation and can contribute meaningfully to the revival of the global economy.

Dr Tanweer Akram
Citigroup Inc

Read the Original

This page is a summary of: The Economics of Japan’s Stagnation, Business Economics, July 2014, Nature,
DOI: 10.1057/be.2014.19.
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