Japan incredible shrinking economy

Japan is in danger of suffering not one but two lost decadesTO LOSE one decade may be regarded as a misfortune; to lose two looks like carelessness. Japans economy stagnated in the 1990s after its stockmarket and property bubbles burst, but its more recent economic performance looks even more troubling. Industrial production plunged by 38% in the year to February, to its lowest level since 1983. Real GDP fell at an annualised rate of 12% in the fourth quarter of 2008, and may have declined even faster in the first three months of this year. The OECD forecasts that Japans GDP will shrink by 6.6% in 2009 as a whole, wiping out all the gains from the previous five years of recovery.If that turns out to be true, Japans economy will have grown at an average of 0.6% a year since it first stumbled in 1991 (see top chart). Thanks to deflation as well, the value of GDP in nominal terms in the first quarter of this year probably fell back to where it was in 1993. For 16 years the economy has, in effect, gone nowhere. ...