Shareswatch Australia

It has been hard to write much about the Japanese economy of late simply because the economic data appeared to change every day. But over the last few weeks things do seem to have stabilised and both the government and the private sector in Japan generally agree that the economy probably hit the bottom earlier this year.

Searching the reasons for Japan’s ‘lost decade’ – the deflation and stunted growth said to have plagued Japan ever since the collapse of the Bubble economy in the early nineties – has long been popular among US and UK commentators seeking an answer to the West’s current economic problems. The interest is welcome. But some of the results are bizarre. Almost all the main US media, the conservative Wall Street Journal in particular, have run articles saying the blame lies with Japan’s post-Bubble, Keynesian-style infrastructure spending.

It seems that the old bubble economy stories about Japan are doing the rounds again in business journals and finance websites these days as lazy journalists try to make comparisons between infrastructure spending in Japan during the 1990′s, and the economic stimulus packages being proposed in the U.S and other countries.