US and Europe ‘could face Japan-style lost decade'

Period of slow growth in US and Europe draws parallels with Japan post 1990

The main risk impacting US and Europe over the next two years is the ‘Japanisation’ of their economies, according to Didier Saint-Georges, a member of the investment committee at Carmignac. He expects them to see a prolonged period of slow growth, much like Japan’s lost decade post the 1990 credit crisis, caused by the deflationary effects of deleveraging. The pressures put upon US and European policymakers by ratings agencies to start tightening their monetary and fiscal policies well before their economies have the time to become self-sustaining will prompt the period of slow growth...