Lost decade

I’ve heard many times before of Japan’s Lost Decade.  I listened to an interview with John Williams of shadowstats.com.  He talks about something I do know, hedonic adjustments. 

Hedonic adjustments is saying that because a washing machine now has a digital readout vs the old mechanical dial to tell you how long till the wash is done that that change is an improvement, but because there isn’t a set price for how much of an improvement the government can set the increased cost to the consumer at whatever they want in order to get inflation up or down to what they need.

Apparently the US started using that several decades ago to tweak inflation in their favor, but Japan and Germany didn’t go along with it in their own countries and so they seemed to have slower growth than the US.  Slower/left behind/lost growth is equal to saying…a “Lost Decade”.  Nothing was actually lost and they grew just fine and at an appropriate amount.  Go figure.