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Slow decade ahead for US, not a lost one

US economy won't endure a 'lost decade' the way Japan did.

United Auto Worker Antonino Rescich assembles a Chevy Malibu at the General Motors Fairfax Assembly Plant in Kansas City, Kan., in 2009. Prospects for the US economy suggest slow growth, but not the deflationary spiral that Japan endured.

Dave Kaup/Reuters/File

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Does America face a "lost decade," such as Japan suffered in the 1990s?

After all, Japan in that decade saw a massive real estate price bubble burst, leading to huge write-downs by commercial banks, deep recession, and – since the late 1990s – sustained stagnation and deflation. The United States has experienced something similar – a financial crash, the Great Recession, a bad slump in housing prices, and minute inflation.

"We are in for a weak decade. But not as bad as Japan suffered," predicts Nigel Gault, an economist with IHS Global Insight, a major economic consulting firm in Lexington, Mass.

Usually, after a serious slump, the American economy revives at perhaps a 7 percent growth rate, says Alan Levenson, chief economist for T. Rowe Price, a mutual-fund management giant based in Baltimore. This time, the US economy is only "gradually gaining momentum."

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