Japan's 1991 asset bubble burst into a stagnation that still hasn't fully ended
When Japan's real-estate and stock bubble collapsed in the early 1990s, banks sat on mountains of bad loans instead of writing them off, and growth stalled for years. Paul Krugman argued Japan had fallen into a liquidity trap: interest rates near zero, yet still too high to revive spending, leaving conventional monetary policy powerless. What was first called the Lost Decade stretched into the 'Lost 20 Years.'