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Global Macro Research

Top of Mind
November 13, 2014

Issue 29

Is Europe the Next Japan?
From the editor: A slowdown in Euro area growth momentum from an already anemic pace, combined with ongoing concerns about deflation risks, has made comparisons with Japan’s so-called “lost decades” Top of Mind. We ask three experts whether the
Euro area is set to repeat Japan’s prolonged period of stagnation and deflation: former
BOJ Governor Masaaki Shirakawa (unclear, but Euro area recovery requires addressing the underlying problem of economic integration and not its symptom, deflation), GS
Chief European Economist Huw Pill (low growth and even some deflation similar to
Japan, in terms of outcome if not in terms of causes, are
…show more content…
There is some similarity to the Japanese experience in the 1990s: growth fluctuated around low levels, but activity never collapsed.”

Paul De Grauwe

Masaaki Shirakawa

Huw Pill

Editors:
Macro Executive Committee:

Allison Nathan | allison.nathan@gs.com | Marina Grushin | marina.grushin@gs.com
Jeffrey Currie | Jan Hatzius | Kathy Matsui | Timothy Moe | Peter Oppenheimer | Dominic Wilson

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification, see the end of the text. Other important disclosures follow the Reg AC certification, or go to www.gs.com/research/hedge.html. The Goldman Sachs Group, Inc.

Goldman Sachs Global Investment Research

Top of Mind

Issue 29

El

Macro news and views
We provide a brief snapshot on the most important economies for the global markets
US

Japan

Latest GS proprietary datapoints/major changes in views

Latest GS proprietary datapoints/major changes in views

 At 4.4%, our CAI reading for October is the highest since 2006; we expect that domestic strengths will allow the US to maintain a pace of economic growth

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