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Opinion
Mark Gilbert

ECB Needs Japanese Lessons

As Europe slides closer to deflation, the ECB should heed both the historical experience and the current efforts of the Bank of Japan about how and how not to resuscitate growth.
The nation on the left can teach the region on the right.
The nation on the left can teach the region on the right.

Economists like to warn about Japanification, the risk that a country will follow the desultory experience of Japan, which slumped into deflation in 1999 and for all intents never climbed out. As Europe slides closer to deflation, the European Central Bank should heed the historical experience and the current efforts by the Bank of Japan to resuscitate growth.

Here's a chart showing annual consumer price changes in the euro region compared with those in Japan since 1999: