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What really caused Japan's Lost Decade? | 54 comments (54 topical, editorial, 0 hidden)
Re: What really caused Japan's Lost Decade? (4.00 / 2)
Still... one wonders if things have not changed slowly, such that capital is much less important for productivity than before...

Given that the world is awash in capital and the strain that is being put on the economy in order to extract from it a "suitable" rate of return on capital, this might well be true.

The brainless should not be in banking -- Willem Buiter

by Carrie (migeru at eurotrib dot com) on Wed Mar 24th, 2010 at 10:57:41 AM EST
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Re: What really caused Japan's Lost Decade? (4.00 / 3)
Awash in capital or awash in financial assets?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Mar 24th, 2010 at 11:12:58 AM EST
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Re: What really caused Japan's Lost Decade? (none / 0)
Capital in the financial sense.

Assets are still overcapitalised as we know since asset prices have dropped but deleveraging hasn't been allowed to run its course because too many well-connected people and institutions would go bankrupt.

The brainless should not be in banking -- Willem Buiter

by Carrie (migeru at eurotrib dot com) on Wed Mar 24th, 2010 at 11:19:58 AM EST
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Re: What really caused Japan's Lost Decade? (4.00 / 5)
The world is awash in claims on productivity, some of which are more plausible than others, but which sum to a ridiculous figure that has no basis in physical or social reality.

As Chris keeps saying - more or less - capital is not a substance, or even a number. Its value derives entirely from its ability to claim the productivity of others, and/or to monopolise resources.

If the productivity or resources don't exist, the book value is meaningless.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Mar 24th, 2010 at 11:36:00 AM EST
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The book value is meaningless... (4.00 / 3)
...but it has real consequences because there are debt contracts tied to inflated valuations from the time the contracts were made, and denominated in money units. The serious people don't want to
  1. allow defaults on any of the debt
  2. allow inflation of the money units
so here we are.

The brainless should not be in banking -- Willem Buiter
by Carrie (migeru at eurotrib dot com) on Wed Mar 24th, 2010 at 12:27:03 PM EST
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Ah, awash in financial assets. (4.00 / 3)
Being awash in promises from one party to another party to pay money under certain condition ... does that net out to a positive or a negative?

I'd not say the economy is awash in real capital overall, though it clearly has too much capital equipment in some sectors and demand-destruction policies leave some needed capital nonetheless unemployed.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Mar 24th, 2010 at 05:55:57 PM EST
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What really caused Japan's Lost Decade? | 54 comments (54 topical, 0 editorial, 0 hidden)
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