Japan’s lost decades may have changed its society for the worse.

Twenty years of

RELATED ARTICLES Japan’s living national treasures Texas Instruments closing Houston, Japan plants to cut costs

struggling with stagnation have left a mark, reports economics writer Charles Hugh Smith in an online article for AOL Daily Finance. He argues that the “consequences for the ‘lost generations’ that have come of age in the ‘lost decades’ have been dire.” “In many ways, Japan’s social conventions are fraying under the relentless pressure of an economy in seemingly permanent decline,” he writes. He points out that young workers, having endured so many layoffs and seen their opportunities diminish over the past two decades, have become less competitive.

Many perceive as pointless the years of schooling and hard work needed to compete for a dwindling number of elite, well-paying jobs.

In the United States, we’re well on our way to doing ourselves similar or worse damage. The good news is that more Americans are becoming aware of the risk of a Japanese-type trap. But not everyone.

Scott B. Sumner, a blogger and professor of economics at Bentley University in Massachusetts, recently attacked the idea that Japan is stuck in a deflationary trap at all. A trap is created when falling prices make consumers and businesses less willing to spend or invest because they expect additional declines in prices, which further depresses the economy.

Mr. Sumner insists that Japan deliberately fosters deflation: “I was under the impression that the Bank of Japan was an ultra-conservative bank, and liked mild deflation.

Indeed I thought that was pretty widely understood. I guess not.” He guesses right. I’m sorry to say that Japan is indeed caught in a deflationary trap. You can argue that the central bank should have done more to try to escape it — and I would — but persistent deflation is not its target.

The country is in this situation because conventional monetary policy has lost traction and the Bank of Japan isn’t willing to be more adventurous.

Look at the graph on this page describing Japan’s monetary base and you’ll see a huge increase from 1999 to 2003. This is the result of a quantitative easing policy — Japan’s attempt to end deflation by stuffing the banks full of reserves in the hope that the money would go somewhere. It didn’t.

Sumner continues: “Of course there are many other reasons why we know that Japan is not stuck in any sort of deflationary gap. They let the yen appreciate strongly during the midst of the great deflationary crisis of 2008-09. They dramatically reduced the monetary base in 2006 to prevent inflation.” The graph reflects that reduction in the monetary base.

It doesn’t look all that dramatic to me, but in any case it was the result of the same kind of debate that’s currently going on in the United States: some people at the Federal Reserve are just itching to exit from unconventional monetary policy.

Reader comm ents from nytim es.com

(Most comments are condensed from longer postings.)

In my 10 years living in Japan, not a single train line, that I am aware of, has raised its fares. Rents are the same or lower, both residential and commercial.

Real estate has reportedly seen a tepid recovery in some urban areas, but prices have generally declined for at least 12 years and counting. And you can imagine what’s been happening to wages and salaries. To anyone who doubts that Japan is caught in a deflationary trap, consider this a sampling of anecdotal evidence.

As the father of a 3-year-old Japanese- American son, I would love to see the future of both Japan and the United States in a more positive light. Unfortunately, the only basis for optimism that I can find is by comparing one to the other, and then deciding which seems less destined to further decline by continuing foolishly conservative, supply-side economic policies.

— Gary Henscheid, Japan

In a way, the state of the economy is the result of a choice the Japanese have made: It would be very easy to spark inflation in Japan — just monetize public debt. However, the Bank of Japan would then have to work hand-in-hand with the government.

This seems to be difficult lately.

— Y.F.C., Brazil

So because of the stagnation in Japan, the new generation doesn’t buy into the rigid norms of their society? This reminds me of the punk movement that began after a decade of Western stagnation in the 1970s. And what followed in the next 20 years? A great period of economic expansion.

— J.H., Amsterdam

Complaints about the youth of Japan come mainly from the generation that rebuilt the country after World War II.

However, it is this same generation that is keeping a lid on the young. I saw this in a job I had with the Japanese government last year.

I had a small staff in their 30s enthusiastically making plans for international opportunities — only to have them quashed by older staffers who were more worried about their immediate fiefdoms.

— A., Japan

Japan’s societal phenomenon has already manifested here in the United States. We of the younger generation are highly cynical about politics, laws, processes and, most of all, corporations. We know that the game has been rigged by people who worship money. We know these people never cared about us, except to measure the pound of flesh that they might extract from our labors for their own profit, and we know that workplace benefits are only a means of placating the middle class, to keep it from revolting outright.

Mr. Krugman, you worry about a lost decade? It was actually stolen a long time ago by baby boomers without a conscience.

— G., Oregon