This paper analyzes Japan's economy in the 1990s, a period of economic stagnation. The authors argue that the problem was not a failure of the financial system, as both large and small corporations could secure financing for investments. There is no evidence that profitable investment opportunities were unexploited due to lack of access to capital markets. The main issue is a low productivity growth rate. Growth theory, which treats total factor productivity (TFP) as exogenous, explains the "lost decade" of Japanese growth well. The authors suggest that research should focus on policy changes that could enable rapid productivity growth. The paper is classified under E2, E13, O4, and O5 in the Journal of Economic Literature. The authors thank several individuals and institutions for their comments and financial support. The paper is published in Review of Economic Dynamics, Volume 5, Issue 1, January 2002, Pages 206-235. The authors are Fumio Hayashi and Edward C. Prescott. The paper discusses various economic topics, including growth models, TFP, Japan, and workweek. It also touches on topics such as the savings and loan crisis, tax planning, regulatory capital planning, financial reporting strategy, bank lending during the 2008 financial crisis, bank information monopolies, regulatory capital coordination, bank holding companies, and Federal Reserve Bank presidents. The paper concludes with a discussion on the impact of these factors on the economy.This paper analyzes Japan's economy in the 1990s, a period of economic stagnation. The authors argue that the problem was not a failure of the financial system, as both large and small corporations could secure financing for investments. There is no evidence that profitable investment opportunities were unexploited due to lack of access to capital markets. The main issue is a low productivity growth rate. Growth theory, which treats total factor productivity (TFP) as exogenous, explains the "lost decade" of Japanese growth well. The authors suggest that research should focus on policy changes that could enable rapid productivity growth. The paper is classified under E2, E13, O4, and O5 in the Journal of Economic Literature. The authors thank several individuals and institutions for their comments and financial support. The paper is published in Review of Economic Dynamics, Volume 5, Issue 1, January 2002, Pages 206-235. The authors are Fumio Hayashi and Edward C. Prescott. The paper discusses various economic topics, including growth models, TFP, Japan, and workweek. It also touches on topics such as the savings and loan crisis, tax planning, regulatory capital planning, financial reporting strategy, bank lending during the 2008 financial crisis, bank information monopolies, regulatory capital coordination, bank holding companies, and Federal Reserve Bank presidents. The paper concludes with a discussion on the impact of these factors on the economy.