Nobody any longer disputes that the patient is seriously ill. Japan in recent years has exhibited the first bad case of deflation in a big economy since the 1930s. It has the highest ratio of public debt to gdp of any big economy in peacetime, though the lowest long-term rates on record somewhat temper the debt burden. Over the past decade, Japan has averaged annual growth of only just above 1%, the worst ten-year performance of any big economy in the past half-century. And now, a mere two years after it crawled out of one recession, Japan seems to have slipped back into another. What will it take to restore this patient to health?
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