Is Germany Turning Japanese?

Adam Posen

No WP03-2, Working Paper Series from Peterson Institute for International Economics

Abstract: After the recent IT bubble, Germany alone among OECD countries is beginning to share Japan's political-economic profile: too many banks with too little capital, macroeconomic policy division and deflationary bias, and financially and politically passive households. Germany has been spared Japan's fate of persistent stagnation so far because of its long-standing openness and commitment to international economic integration. But this commitment is newly in jeopardy, as Germany backs an approach to the European Union's enlargement that would elevate the power and interests of larger incumbent nations - a shift from Germany's traditional support for EU federalism. The change in the German approach to EU enlargement could well tip the country into a full-fledged Japan syndrome.

Keywords: Germany; Japan; economy; banks; banking; macroeconomic; international economic integration (search for similar items in EconPapers)
JEL-codes: E44 E61 F43 P52 (search for similar items in EconPapers)
Date: 2003-03
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Citations: View citations in EconPapers (7)

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