Abenomics: has it worked? Will it ultimately fail?

Abstract

Abenomics initially generated high expectations but it has more recently come to be seen as yet another failed economic experiment. In addition, discussion of Abenomics often verges on caricature. It is thus crucial to provide a critical and balanced evaluation. We argue that, over the past five years, the proactive policies pursued under Abenomics played a decisive role in reversing one cause of the Japanese slowdown – inconsistent economic policies – and that they are now yielding preliminary results. We are more critical with regard to long-term issues: as the case of trade policy shows, the problem is not so much a lack of structural reform as limits to its ability to increase Japan's growth potential.

Keywords:

• monetary policy
• fiscal policy
• structural reforms
• deflation
• Japan

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Erratum

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Efforts began to bear fruit in 2014, which witnessed a moderate increase in the bonuses paid to workers. More significant progress was made in 2015 when, for the first time in over 10 years, companies such as Toyota increased the fixed component of compensation. By 2017, however, real wage growth has reached a near standstill.

Additional information

Funding

This work was supported by the European Union's Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No 645763.

Notes on contributors

SÉbastien Lechevalier

Sébastien Lechevalier is Professor at the EHESS and Associate Professor at Sophia University. Corresponding author: [email protected]

Brieuc Monfort

Brieuc Monfort is associate professor at Sophia University. He may be contacted at [email protected]