Japan is now 40 to 50 percent below what the world in 1991 would have estimated their GDP to be in 2012.
Do we attribute this to:
The forecasting community was just wrong--Japan was having adverse technology shocks that few foresaw, and so no matter what macro policies they followed and no matter what antibubble policies they followed their GDP today would be about what it is, for the prevailing potential estimates back in 1991 were just wrong?
If Japan had avoided its bubble and the resulting financial crisis, it would today have far higher GDP--but once the crisis happened, it ruined into an adverse supply shock and most of what has happened since was then predestined.
If only Japan had followed the Posen plan rapidly after their bubble burst, their world would be very different today and GDP in Japan would indeed be 30-40% higher than it is.
What is the best way to think about this?