IS EUROPE succumbing to “Japanification”, whereby poor demography and the legacy of a debt crisis lead to a long period of sluggish growth and low inflation (or even deflation)?
Some economists argue that the situation is not that desperate. Europe could do a lot to spice up its growth rate with a dose of reforms—making its labour markets more flexible and reducing the influence of cartel-like guilds, for example. But Japanification is starting to appear in one prominent area: the bond market.
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