The world is entering a recession that may last up to eight years as the U.S. heads toward a “lost decade” similar to Japan’s slowdown in the 1990s, said Eisuke Sakakibara, formerly Japan’s top currency official.
Sakakibara became known as “Mr. Yen” during his 1997-1999 tenure at the Ministry of Finance for his efforts to influence the yen rate through verbal and actual intervention in the currency markets.
“The world is set for a long-term structural slump reminiscent of the 1870s” when average annual growth was about 1 percent, Sakakibara, who is a professor at Aoyama Gakuin University, said today at a conference in Tokyo. The slowdown may last three to four years, and depending on the circumstances, may drag on for seven to eight years, he said.