ECONOMY What Everyone's Talking About: Japanification

Some of you are heading to Japan for the Rugby World Cup and 2020 Olympics. We're visiting to better understand what's going on with the global economy. Starting in the early 1990s, Japan suffered from low growth, low inflation, and low interest rates. In response, the Bank of Japan pursued unorthodox monetary policy, but it couldn't restart the economic engine. It was like feeding a vending machine that never gave anything back.  Some economists, including former Treasury Secretary Larry Summers, see shades of "Japanification" happening right now in Europe...and maybe even the U.S.  @LHSummers Here's one example: Globally, more than $16 trillion worth of bonds, over 30% of the total, trade at below-zero yields, the FT reminds us. (Yes, a sub-zero yield means you are paying someone to hold onto your money.) Bottom line: The prospect of Japanification spreading to other countries is all the rage in the central banker Slack channel. It means their traditional tools for stimulating the economy might not work this time around.