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Europe Is Closely Studying Lessons From Japan

Europe Is Closely Studying Lessons From Japan

They Fear Euro Zone Is Falling Into Similar Lethargy

MARCUS WALKER

Updated June 29, 2014 7:45 p.m. ET

BERLIN—If Europe is tilting toward becoming the next Japan, does that mean it needs its own version of Abenomics?

Japanese Prime Minister Shinzo Abe’s announcement last week of fresh measures to improve sluggish growth coincides with an intensified debate in Europe about whether the euro zone is sliding into similar long-term lethargy.

The euro zone’s stuttering recovery and rising dependence on spending elsewhere are a worry for global growth. The 18-country currency bloc, with its $13 trillion economy, is too big to be a passenger without weighing others down, too.

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But how meaningful is the comparison with Japan, which has managed barely 1% annual growth for the past two decades, and how similar are the problems and potential cures? Japan famously fell into a self-perpetuating deflation in the 1990s, with falling prices leading consumers and business to delay spending, thus keeping growth weak.

Read more at http://online.wsj.com/articles/calls-mount-for-europe-to-adopt-abenomics-1404062899

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KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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