Then why not the US?
http://www.forbes.com/sites/eamonnfingleton/2013/02/06/paul-krugman-says-it-again-japans-stagnation-is-a-myth/during the decades of Japan’s alleged stagnation, living standards have actually improved faster in Japan than they have in the United States.
And why is this? What does Japan have that the US (no longer) has? A closed system. Strict immigration controls. Trade protectionism.
It turns out that responsible monetary policy actually leads to economic improvement under those conditions. Who knew.
Just look at Japanese corporations. Virtually without exception they have continued to boost their revenues — and maintained their employment levels — in the face of a constantly rising yen.
Yet more empirical evidence that Keynesianism only makes sense under the un-physical fantasy-land assumption of infinite growth.
Make sure you click through to the actual Krugman piece, rather than taking Eamonn Fingleton's word for what Krugman is saying.
http://krugman.blogs.nytimes.com/2013/02/05/the-japan-story/Fingleton has a slightly odd take on this stuff. His big argument way back when was that Japan's economic stagnation was a cunning and devious trick to allow them to keep putting up trade barriers while the US took down theirs. This theory was quite popular in the US at the time, because it gave people a good conspiracy / external threat story to justify protectionist measures to keep out Japanese products.
He wrote this book "Blindside: Why Japan Is Still on Track to Overtake the U.S. By the Year 2000", which was based on a prediction about Japanese GDP beating US GDP.
http://www.amazon.com/Blindside-Japan-Still-Track-Overtake/dp/0395633168This obviously failed to happen, but instead of figuring he must have gone wrong somewhere he doubled down, and started coming up with amazing theories about why Japan really was beating the US, despite all the evidence to the contrary.
What Krugman actually says about Japanese deflation is:
What is true is that there were two long periods of depressed output relative to trend, one in the mid-1990s and another, much worse, between 1997 and 2007. And one other thing: Japanese monetary policy was still up against the zero lower bound in 2007, leaving it no room to counter the Great Recession, and hence leaving Japan open to a deep slump when exports plunged.
This is what he's always saying about deflation killing growth.