I stumbled upon Jesper Koll’s talk about similarities and differences between US and Japaneses recession. Jesper uses a chart with data to explain how many units of finance we need to make one unit of national income (GDP). Goal is to highlight differences between these two economies. The differences are:

1. Obviously US is a bigger economy compare to Japan.
2. For US to generate one unit of national income, finance provided by bank lending is less (2.1 units) than other credits (5.8 units) which are shadow banking (derivatives, securities etc).  For Japan to generate one unit of national income, finance provided by bank lending is more (3.7 units) than other credits (1.1 units).
3. In US since finance was provided by global firms (shadow banking) impact was global. In Japan, bank loan was financed by local Japanese bank and so impact of recession was also local.

As per as similarities, well like it or not unemployment is where Jesper thinks these two economies are similar. Another data he shared was also interesting it was about  supply side revolution.  Here Jesper explains wage and population gap between winner and looser economy.

So check out Jesper’s talk below.

See below my spin on data from Jesper’s talk. Instead using data table which is busy, I am using just peak year numbers from the chart to address differences in US and Japanese economy.  Hope this still gives enough to understand three differences Jesper wants to highlight. Many times simple bar graph can be very effective. Enjoy!