Reports that Japan's GDP contracted by 1.7% in the July-September quarter had markets reeling with the news that the country had fallen into its 3rd recession in 4 years.  A recession is generally understood to be two consecutive quarters of GDP contraction. Japan's second quarter contraction was 7.1%. Prime Minister Abe came into office promising to end the ruinous deflation that was dragging the economy down.  He also pledged to address the country's burgeoning sovereign debt crisis.  As for the latter, Abe imposed a massive sales tax increase that led to the second-quarter economic free fall.  That was fully expected, although the level of contraction surprised many economists. But the conventional wisdom was that the economy would recover slightly in the third quarter.  As the markets found out this morning, this was not to be. What does recession in Japan mean for the world economy? Business Insider: The slump comes as...(Read Full Post)