Six Abenomics lessons for a world struggling with ‘Japanification’
Prime Minister Abe Shinzo’s monetary policy and growth strategy failed to transform the economy
“Buy my Abenomics!” urged Japanese Prime Minister Abe Shinzo in 2013. And we did. In a triumph of Something-nomics branding, Abe convinced the world that his so-called three arrows of “bold monetary policy, flexible fiscal policy and a growth strategy” would transform Japan’s economy. Now Abe is stepping down after more than eight years in power, it is time to judge: did Abenomics succeed?
The simple answer is no. The central goal of Abenomics was an inflation target of 2%. Yet even before Covid-19 Japan never got closer than about 1%. This is failure. But like a football team that fails to win the league, defeat does not necessarily mean you were bad, just not good enough. Abenomics had its moments. For a world struggling with “Japanification” — a slide towards stagnation, deflation and ultra-low interest rates — it holds powerful lessons...