Lakshman Achuthan, head of the Economic Cycle Research Institute, is out with some new commentary today.
Achuthan, the controversial economist who is convinced that the U.S. slipped into a recession in mid-2012, warns that the economy is not on its way back to trend growth.
He believes that Japan's lost decade is a good case for what's to come in the U.S., and he illustrates it with a 3-D bar chart.
"Japan’s entry into its lost decades (1992 to present, red bar), and the other developed economies’ entry into the 21st century (yellow bars), saw major downshifts in growth." he says. "Notably, the U.S. and other major developed economies have experience slower growth in the last five years (blue bars, front row) than Japan experienced in its lost decades (red bar)."
Achuthan, notes that Japan employed quantitative easing to stimulate its economy, a path that the U.S. economy is on now.
"[T]o those betting on a return to much stronger trend growth, either after the end of deleveraging or after policy changes, it is simply not convenient to recognize that the downshifts in growth are global in nature," he adds.