Will America come to envy Japan's lost decade?
That's Ezra's question, read this too. Moving away from traditional macro, I would add two points:
1. Japan has seen numerous quality improvements over the last twenty years, and Japanese consumers are renowned for valuing quality. The CPI mismeasurement problem may be greater for Japan and real Japanese living standards perhaps have risen a bit more rapidly than the numbers indicate.
2. Japanese politics is less competitive and Japanese rent-seeking is less competitive than in the United States. Sustained near-zero growth in the United States would mean that interest groups tear apart the social fabric and grab too lustily at the social surplus. Whether we like it or not, we are "built to grow" and we use the fruits of that growth to buy off interest groups as we go along. Japan in contrast has greater capacity to stifle these grabs for new redistributions because their politics is more of an insider's game.
Imagine a future world history where, fifty years from now, we look back and decide that Japan was the one country that made a semi-success of near-zero growth. Which means we are now watching a Golden Age there of sorts. I'm not betting on that, but if you're looking for strange scenarios that's my suggestion for the day.
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