The Threat of Deflation Grows

The transcript discusses the economic conditions in Europe, focusing on inflation and deflation. It highlights the sluggish growth and low inflation in Europe, drawing comparisons to Japan. The role of central banks, particularly the ECB, in addressing these issues is examined. The conversation also touches on the potential for economic recovery and the importance of clearing balance sheets to improve financial stability.

What are the implications of sluggish nominal growth in Europe?

How does the current inflation situation in Europe compare to that of Japan?

What prescription do central banks need to follow to address deflation in Europe?

What challenges do central banks face in implementing fiscal policy measures in Europe?

Discuss the impact of balance sheet clearing on the economic recovery in Europe.