Societe Generale analyst Dylan Grice has attacked the idea of the balance sheet recession, pioneered by Richard Koo, suggesting that it's a sham.
Grice notes that the balance sheet recession episode that Japan has encountered is only one blip in history, and may not represent the "base rate" for what is likely after the collapse of a credit bubble. The "base rate," for Grice, is the underlying likelihood of something based upon statistical analysis. It ignores specific additional details, if they are deemed irrelevant.
As such, the "base rate" of a prolonged deflationary crisis is actually quite low.