Japan´s lost decade: on the development of the Japanese economy in the 1990s

The objective of this article is to describe and analyse the economic development and to summarize and explain the most important factors that have caused the long-term stagnation and instability of the Japanese economy in the 1990s (so called „lost decade“). The asset price bubble collapse at the beginning of the 1990s has probably activated and amplified impacts of other complicated processes in the economy, especially of the protracted deflation and insufficient final domestic consumption. The burst of the bubble has negatively affected both Japanese financial sector, production and investment activity of Japanese companies etc. It is also possible to identify some important structural deficiencies and rigidities that limit both the effectiveness of government anti-stagnation measures and development of the supply side of the Japanese economy.