Europe's current economic predicament sounds a lot like Japan’s in the 1990s, which culminated in a “lost decade” of stagnant growth and deflation from which the country is still working to recover. How can Europe avoid a similar fate?
MUNICH – Europe is in a difficult predicament. Inflation has fallen to 0.4%, and economic growth has been anemic for years. Though the European Central Bank has kept interest rates close to zero, private credit growth is stalling and public debt continues to rise. This sounds a lot like Japan’s situation in the 1990s, which culminated in a “lost decade” of economic stagnation and deflation from which the country is still working to recover. Is Europe bound for a similar fate?
MUNICH – Europe is in a difficult predicament. Inflation has fallen to 0.4%, and economic growth has been anemic for years. Though the European Central Bank has kept interest rates close to zero, private credit growth is stalling and public debt continues to rise. This sounds a lot like Japan’s situation in the 1990s, which culminated in a “lost decade” of economic stagnation and deflation from which the country is still working to recover. Is Europe bound for a similar fate?