NPR.

This is the indicator from Planet Money, I'm Whalen Wong.

And I'm Adrian Mah.

There's a big question haunting the US economy right now.

And that is, can the Federal Reserve bring down high inflation without causing more economic

pain in the form of lost jobs without tipping the economy into a recession?

Today, the Bureau of Labor Statistics released July CPI numbers that showed prices rose

8.5% from a year earlier.

This is a slowdown from June, but inflation is still high.

And the Fed will want to see more cooling off before it makes any big changes in its

strategy.

And this task facing the Fed is more than a binary of can the economy avoid a recession

or not.

Hey, it's a question of if the economy goes into recession, what will it look like?

And because there are different kinds of recessions, some are more painful than others.

And the kind of recession that policymakers really want to avoid, the kind with the most

painful recovery process, is called the L-shaped recession.

Still, there's been some debate about whether we need one to deal with this current

out of inflation in the US.

Today on the show, we're going to explore that question by looking at a cautionary tale

of an L-shaped recession that happened in another country, Japan.

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