US now looks like Japan

Patrick Emerson PhD ,
OSU Economist
Oregon Economics Blog

Yet another month with good-but-not-great job growth figures.  How long has this been now, five years?  We  find out that the US economy added 162,000 jobs and that unemployment fell to 7.4%.

I think it is pretty clear that folks that were pointing to a Japan-style malaise had it just about nailed.  Japan’s lost decade is looking a lot like what the US is in now.  I think those that argued for a more forceful monetary and fiscal response has the weight of the evidence on their side though I for one remain unconvinced that we have the ability to pull off more fiscal and monetary stimulus.  Needless to say the timing of the sequester and the Fed’s potential tapering look unfortunate.

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