The power of narratives is as strong in the teaching of monetary economics as in any other area of learning. Yet the stories teachers use to demonstrate difficult hypotheses often derive from folklore rather than fact. In current economic discourse, neo-Keynesian economists shamelessly use mythical stories of what went wrong during the Great Depression in the US and during the ‘lost decade' in Japan to justify their favoured remedies. In this article, we take aim at their narrative on Japan and