Why Germany's economy will outshine Japan

For the past fifteen years, the world's second and third-largest economies have seemingly been engaged in a race to the bottom. Both are now on the mend - but which will regain its full strength first?

For the past 15 years, many a pessimist has had a field day with the so-called race to the bottom between the world's second and third largest economiesJapan and Germany. As a post-bubble Japanese economy became trapped in deflation and a series of rolling recessions, an increasingly sluggish and inherently rigid Germany economy was widely feared to be next. The verdict is now inthose fears were vastly overblown. Not only did Germany never fall into a Japanese-like quagmire, but the engine of Europe is now very much on the mendwith a newfound sense of vitality that is still missing in Japan.

Japan vs. Germany: export performance

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