Economics
Draghi’s Stimulus Shot Is No Cure for Europe’s Japanification
- ECB cut rates and restarted QE but structural issues are key
- Japanese analysts draw parallels over low inflation and growth
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The monetary stimulus that European Central Bank President Mario Draghi unleashed last week won’t be enough on its own to prevent an extended period of low economic growth and feeble inflation.
That’s the view of analysts in Japan, a nation with long experience of entrenched weakness where the central bank has also dived into a combination of negative interest rates and quantitative easing. They see parallels in the euro area as long as it’s blighted by fundamental challenges such as low productivity growth that lie outside the realm of monetary policy.