Richard Koo - A "Balance Sheet Recession"

The video discusses Japan's economic experience during a prolonged recession, highlighting the unique challenges faced when companies prioritize debt repayment over profit maximization, even at zero interest rates. It compares this situation to the Great Depression, emphasizing the ineffectiveness of traditional monetary policy. The video explains the necessity of government intervention through fiscal stimulus to counteract private sector deleveraging and maintain economic stability.

What challenges did the Japanese government face in stimulating the economy?

How did the concept of 'balance sheet repair' impact corporate behavior during the crisis?

What lessons can be learned from Japan's experience with economic crises?