If only it were that simple. For starters, the parallels between crises in the two economies are striking. Both suffered from the bursting of two major bubbles – property and equity in the case of Japan, and property and credit in the US. Both had broken financial systems stemming from egregious risk management blunders. Both were victimised by a reckless lack of oversight – regulatory failures, misdirected rating agencies, and central banks that ignored asset bubbles. And the twin bubbles ended up infecting the real side of both economies – the corporate sector in Japan and the consumer sector in the US.

In spite of the similarities, few believe that America is Japan. The hope rests on monetary policy. The Federal Reserve laid the groundwork for its approach in 2002 in the aftermath of the dotcom-induced bursting of the equity bubble. A landmark paper co-authored by 13 Fed staff economists concluded that the failures of the Bank of Japan in coping with the bursting of its bubbles were traceable to the lack of speed and vigour in its monetary policy response. It follows that a quicker and bolder reaction would have made a critical difference.

And so the script was written for America's central bank. Bubbles come and go – not much you can do about that, the Fed has long maintained. However, if the monetary authority rides quickly to the rescue of a post-bubble economy, a Japanese-style trap can be avoided. This approach appeared to pass an important reality check following the bursting of the US equity bubble in 2000. The Fed was quick to slash the federal funds rate by 550 basis points to 1 per cent and the US economy eventually recovered. In a celebrated mission-accomplished speech, Alan Greenspan boasted of success in “addressing the bubble's consequences rather than the bubble itself”.