How to prevent acute “Japanisation” in the euro zone?

We look at what the euro zone can do to withstand the various features of a “Japanisation” of the economy (population ageing, skewing of income distribution, monetisation of public debt). Population ageing must be offset by higher productivity gains, with the economy rising up the value chain; Weak wages and excess corporate savings must be offset by a persistently expansionary fiscal policy; But the monetisation of huge fiscal deficits must be accompanied by a sharp increase in demand for money and bonds so as to avoid giving rise to bubbles (in equities, real estate, etc.). These developments, only the last two of which are visible in Japan, will have to take place in the euro zone for the Japanisation of the economy to not have severe consequences.