The Federal Reserve has moved to pump up the U.S. economy with an unconventional

Nearly a decade after Japan's central bank first experimented with the policy, the country remains mired in deflation, a general decline in wages and prices that has crippled its economy.

And just as politicians in the U.S. are criticizing the Fed for veering beyond traditional monetary policy and are threatening to curtail the bank's independence as a result, lawmakers in Japan say they'll do the same to the BOJ as punishment for its failure to cure the scourge of falling prices.

Japan's experience offers a case study in the possibilities and limits of quantitative easing, in which a central bank effectively prints money to spur economic activity.

The BOJ began doing quantitative easing in 2001. It had become clear that pushing interest rates down near zero for an extended period had failed to get the economy moving. After five years of gradually expanding its bond purchases, the bank dropped the effort in 2006.

At first, it appeared the program had succeeded in stabilizing the economy and halting the slide in prices. But deflation returned with a vengeance over the past two years, putting the Bank of Japan back on the spot.

So why didn't quantitative easing work in Japan? Critics say the Japanese central bank wasn't aggressive enough in launching and expanding its bond-buying program─then dropped it too soon. In 2006, prices had just started rising, a sign that quantitative easing was beginning to work. But some indicators were already signaling a slowdown in the economy.

Others say Japan simply waited too long to resort to the policy. Tomoya Masanao, who oversees the Japanese portfolio for bond fund giant PIMCO, points out it took the BOJ two years after Japan's consumer prices started falling to launch its bond-buying program. What's important is to do it quickly and aggressively before inflation expectations start to diminish,' Mr. Masanao says. 'It's very clear other central banks have learned this lesson well' from what happened in Japan.

U.S. inflation is now below the Fed's informal target of just under 2%, and the American central bank is trying to respond early to protect the economy from falling into outright deflation.

BOJ officials also seemed half-hearted as they launched the policy, failing to explain it sufficiently or making a strong case for public support. Confidence also eroded as the bank started and stopped various programs over the years. In 2000, for instance, the bank ended a zero-interest-rate program, only to resume it several months later when it became clear they had halted it too soon.

In the U.S., by contrast, Fed Chairman Ben Bernanke and other top officials signaled for months their plans to launch another round of bond-buying. They also have publicly defended the policy against mounting criticism─from leaders abroad, some U.S. politicians and a few of their own central bank colleagues.

Trying to defend past policy choicesBOJ officials have said quantitative easing wasn't the right tool to fight Japan's deflation, which was rooted in structural problems such as a rigid employment system that obliges companies to cut salaries for all rather than eliminate unneeded jobs.

The governor of the Bank of Japan, Masaaki Shirakawa, in a speech in Washington in October, warned the U.S. and other developed countries that their circumstances may differ from Japan's. 'Japan's 'lost decade,' ' he said, 'was crucially attributed to the decline in population and productivity.' The U.S., in contrast, has a growing population and rising productivity.

If the lesson other countries draw from Japan's experience, he said, is that 'short-term stimulative policy measures' are the only cure, then 'they will face a risk of writing the wrong policy prescription.' Maintaining what he described as 'the flexibility of the economic structure' is just as important, he said, though hard to do in the aftermath of a burst bubble.

Mr. Shirakawa also cautioned that maintaining easy monetary policy 'for an extended period' will likely yield unwelcome unintended consequences.

The BOJ remains cautious about launching any major new programs aimed at boosting the economy, which has opened the door for politicians to step up pressure on the bank. 'Every policy has its side effect,' says Yoichi Kaneko, a ruling party lawmaker leading efforts to reduce the Bank of Japan's independence. 'That's why they need to decide what's really important and pursue it vigorously.' In this case, he says, the priority is beating deflation.