With the U.S. housing market still under duress, commodity prices off sharply, stock prices still floundering, and a lot of sales at the mall, the economic bugaboo "deflation" has been very much in the air lately. The word conjures up any number of nasty images — most immediately, Japan since the 1990s, when the country found itself in a deflationary quagmire and struggled (unsuccessfully, to date) to fix the problem with different policy balms, most famously its zero-interest-rate policy that made the Japanese yen the darling of forex carry traders around the world.

Now the U.S. has a zero interest rate as well, and despite the fundamental differences (for better or worse) in the Japanese and American economies, there is a great deal of speculation the U.S. might be in for some of the same medicine the Japanese have been quaffing for more than a dozen years.

What caused Japan’s economic malaise, and what are the lessons from the country’s so-called "lost decade"?