Japan’s economy was once vibrant. Then it fell into a 30-year recession. : Planet Money : NPR

Last month, the Bank of Japan raised interest rates for the first time in 17 years. That’s a really big deal, because it means one of the most terrifying horror stories in modern economics may finally be coming to an end.

In the 1980s, Japan created an economic miracle. It became the world’s second-largest economy. America was flooded with Japanese imports, from Walkmans to Toyota cars. Japanese companies invested heavily. Sony bought Columbia Pictures. Mitsubishi became the new majority owner of Rockefeller Center.

But in the early 1990s, everything suddenly came to a halt. Japan went from being one of the fastest-growing countries in the world to one of the slowest. This economic stagnation lasted for decades.

This episode tells the disturbing story of Japan’s lost decades: How could one of the world’s most advanced economies suddenly fall over, never to get back up? Japan’s plight changed our understanding of what can go wrong in a modern economy. And gave us some new tools to try to fix it.

This episode is hosted by Jeff Guo, produced by Emma Peaslee, designed by Cena Loffredo, and edited by Molly Messick. Alex Goldmark is the executive producer of Planet Money.

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Music: NPR Source Audio – “Haunted Fairground,” “Wrong Conclusion,” and “Strange Tango”