What If Japan Sank Deeper?

In one model, a mild U.S. slump

Global policymakers fear that if Japan doesn't close its insolvent banks and pump up its moribund economy, its festering problems could turn into a global crisis. But how exactly would that play out? Economists from Standard & Poor's DRI recently set out to quantify the consequences of a Japa-nese crash for the rest of the world, including the U.S. The outcome for the U.S.: bad, but not catastrophic.

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