The “Japanification” of the world economy and the crisis to come

More than twelve years after the start of the global financial crisis, one may be under the impression that the economy is back to normal and is even doing quite well: the United States has been growing uninterruptedly for more than ten years, thus experiencing its longest expansionary phase since at least 1854; the euro area, which was on the verge of exploding in 2012, seems to have recovered some degree of stability and cohesion …

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Why can’t Greece get out of debt?

Between 2007 and 2015, Greece’s public debt rose from 103% to 179% [1] of its GDP (see chart below). The debt-to-GDP ratio rose at an uninterrupted pace, except for a 12-point fall in 2012 following the restructuring imposed on private creditors, and despite the implementation of two macroeconomic adjustment programs (and the beginning of a third) that were aimed precisely at redressing the Greek government’s accounts. Austerity has plunged the country into a …

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