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Japan's net financial liabilities used to take it off the hook. However, they too have soared, and now stand well above Greece's, at 140 per cent, and rising. Many will argue that although these ratios seem impossibly high, the debt is mostly domestically owned, and thus not vulnerable to jittery foreign financial markets, currency fluctuations and the like.
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Six years beyond the onset of global crisis and the lamentation seems louder: pundits are increasingly perplexed by the planet's prolonged period of perpetual perturbations. So, does anything stand out in 2014 as an "out of the blue" development?
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TOKYO - Japan's economy unexpectedly shrank in the third quarter as housing and business investment declined following a tax hike, dragging the country into a recession and further clouding the outloo...
Pessimism is a hallmark of the post-crisis period, and it was with us for so long, we almost didn't notice. Confidence -- its polar opposite -- is one of those necessities that we take for granted. That is, until they are taken away. Without confidence, at best we cower in the shadows, coming out to carry on basic activities, and scurrying back for shelter. At worst, it causes the collapse of financial systems and the distribution of goods and services -- in a word, chaos. But this year, we regained something: hope.
The bottom line? Fiscal policy is already a drag on growth, and will be, but perhaps not for as long as many now believe, given the speed with which fiscal dynamics can flip around. Monetary policy is generally expected to tighten, but in a way that does not undermine, but rather lend support to nascent economic growth.