Thus, the Japanese economy’s potential annual growth rate slowed by roughly an additional two percentage points at the beginning of the 1990’s, as the post-WWII development model lost its steam. It was largely a fluke that this growth slowdown coincided with an asset-bubble collapse and a cyclical depression – one that caused Japanese output to shrink by about 10% in a few short years, followed by only a slow recovery to the new, lower potential growth rate.