Stephen Roach mentions Richard Koo's book 'Balance Sheet Recession' as a reference to the economic situation in Japan during their lost decades.
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You alluded to the auto area that was a major issue of contention we've negotiated some voluntary export restraints on Japan and then in Japan who you know we had a very close security relationship with which is of course very different than our current situation with China.
Japan was eager to shift some of its domestic auto production into the United States through building and investing in American made facilities using American workers and so we all ended up buying Japanese cars but you know they were produced in the United States but I think the end game was quite tough for Japan.
You know Japan went from a growth miracle to a growth bust went through arguably three lost decades of near economic stagnation considerable amount of which was an outgrowth of the currency policy that we and other developed nations imposed on Japan they voluntarily agreed to it but that triggered a series of policy blunders that led to asset bubbles and you said you spoke with Richard Koo the balance sheet recession that he's written so eloquently about that really left Japan flat on its back for as I said nearly three lost decades so Japan didn't end around in moving production of the US and then was you know effectively neutered as an economic power by these lost decades and so it didn't end all that well for Japan.
