The main issue in Japan during the 90s was that the government refused to acknowledge the reality of the situation and let the market crash. Instead of allowing bankruptcies and bad loans to clear, they propped up banks and corporations for years - freezing growth and causing decades of deflation and stagnation. The real lesson from Japan isn’t about the crash itself, but about the response: avoiding short-term pain led to long-term paralysis.
If an AI bubble bursts, it would probably resemble the dot-com crash more than Japan’s experience. Central banks act much faster now, bad debt gets cleared out instead of buried, and the global economy isn’t built entirely on AI speculation. So even if valuations take a hard hit, a decades-long depression like Japan’s is very unlikely.
fodor@lemmy.zip 6 days ago
I would say Japan never recovered. The yen is weak, the cost of living is skyrocketing, and Japanese people have said in large-scale national polls that they struggle more to make ends meet than they ever have. Also, the rich are getting richer, and there are far fewer permanent jobs than there were two decades ago.