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America is experiencing the worst economic downturn since the Great Depression originating with problems from mortgage backed securities and seeping into every major sector in the economy. We have witnessed the downfall or government takeover of some of the most powerful companies in the country, contributing to the highest unemployment rate America has seen in decades. During the 1990s, Japan experienced what is commonly referred to as “the lost decade,” a period of prolonged stagnant growth. Many similarities can be drawn between the current U.S. crisis and the Japanese crisis of the late 90s. The macroeconomic conditions that caused the recession, the government aid policies and multiple failures in the banking system appear quite similar. I will compare and contrast the source of each crisis and the measures taken or currently being considered to end the situation. Perhaps by visiting the past we can learn from previous policy decisions and avoid making the same mistakes that hobbled the Japanese economy for almost a decade.