Japan, struggling against two decades of stagnation and deflation, had to resort to Abenomics to avoid a quintuple dip recession. In the United Kingdom, the debate since last summer has focused on the prospect of a triple dip recession.

Nor is it clear why investors should stock up on gold if the global economy dips into recession again and concerns about a near depression and rampant deflation rise sharply.

Time is a luxury that Europe does not have. With every month that the economy loses productive capacity, the likelihood of stagnation and deflation rises.

After its banking crisis of 1987 1989, Japan experienced two decades of stagnation and deflation with skyrocketing government debt.

If they remove the stimulus too soon by raising taxes, cutting spending, and mopping up the excess liquidity, the economy may fall back into recession and deflation.

A public debt crisis in Japan (as the combination of recession, deflation, and high deficits drove up the debt GDP ratio).

While fiscal austerity may be necessary in countries with large deficits and debt, raising taxes and cutting government spending may make the recession and deflation worse.

Starting with the advanced countries, the eurozone recession has spread from the periphery to the core, with France entering recession and Germany facing a double whammy of slowing growth in one major export market (China Asia) and outright contraction in others (southern Europe).

Inflation and deflation of debts produce very different outcomes.

In selling massive stimulus packages and bank bailouts, Western leaders told their people, We must do this or we will end up like Japan, mired in recession and deflation for a decade or more.

The ensuing losses will aggravate the financial turmoil and economic contraction.

So the right s turn in government was followed by years of stagnation and exploding unemployment. Unable to cope with the downturn, the right was replaced by another SLD led government in 2001.

After its banking crisis of 1987 1989, Japan experienced two decades of stagnation and deflation with skyrocketing government debt. Preventing a repetition of this scenario is the main challenge for European policymakers in the coming years.

Domestic deflation means that the real interest rate on Japanese bonds is higher than the nominal rate.

Abe is right about one thing Japan needs to get out of its no growth and deflationary trap.

Purchasing managers indices are now threatening the 50 threshold, which has long been associated with the break even point between expansion and contraction.

Secular Stagnation for Free

Double Dip Days

Imagining Recession

Recession Insurance

Stagflation Cometh

A depression seemed possible.

The Recession Dating Game

Unable to cope with the downturn, the right was replaced by another SLD led government in 2001.

The Problem With Secular Stagnation

Dog Days For The Super Dollar

America s 2001 recession was one brief, mild double dip.

Unfortunately, the Great Recession of 2008 2009 is far from being a normal global recession.

That is partly because the job losses during the Great Recessionwere so large twice as large as those of previous recessions since the Great Depression.

How to Avoid a Double Dip Global Recession

The Perfect Storm of a Global Recession

If they take away the monetary and fiscal stimulus too soon when private demand remains shaky there is a risk of falling back into recession and deflation.

We live in an age of simultaneous fear of inflation and deflation of unprecedented prosperity amid growing inequality and of technological advancement and resource depletion.

For all of these reasons, excessive austerity and deflation could defeat its own purpose and make the reforms to improve the southern European countries competitiveness impossible to implement.

The recession was inevitable.

Stagnation is the main threat.

Have the Japanese people opted for it?

Now recession looks certain.

The Shape of America s Recession

Abe is right about one thing Japan needs to get out of its no growth and deflationary trap.

General deflation eliminates the capital of yet more financial intermediaries, and makes risky an even larger share of assets that had previously been regarded as safe.

Economic stagnation has come to appear endless.

But these regions are nevertheless mired in recession.

A painful decade of stagnation for America lies ahead.

The wrong public policies can induce recessions.