Europe Is Closely Studying Lessons From Japan
June 30, 2014 Leave a comment
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.
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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