Part 10/11:
A New Economic Reality
By the late 1990s, Japan faced a deflationary spiral, effectively becoming trapped in a liquidity crisis with interest rates nearing zero. This predicament prompted the adoption of quantitative easing and forward guidance by the Bank of Japan—new monetary strategies that have influenced global economic policy in subsequent decades.
Despite learning from its painful economic lesson, Japan has continued to grapple with significant challenges, including an aging population and the question of economic sustainability amid demographic decline.