Japan is too different from the rest of the world to be used as a road map - we should just ignore it.

farrelly’s once subscribed to this view. Fortunately, we eventually came to the view that precisely because Japan is so different, it is actually a great place to test new economic environments. More often than not, the Japanese have been there first and the lessons we can learn from their experience are completely valid in other, very different, economies. Let’s look at some examples.

Is Quantitative Easing inflationary? Starting in 2001, Japan conducted QE with little discernible...