2013 Reports

Abenomics: Japan’s New Economic Policy Package

Patrick, Hugh T.

This paper addresses Japan’s economy, its new economic policy package, and the new term – Abenomics – that is used to describe the three pillars, or “arrows,” of the Abe government’s focus on the Japanese economy and on economic policy. The term Abenomics is an example of brilliant branding. At the same time it is risky, since it implies Prime Minister Abe’s success or failure will depend on the success or failure of Abenomics. This paper makes three major points. First, it is far too early to tell whether Abenomics will be successful – in ending deflation, bringing about price stability and getting the economy onto a stable, full employment growth path. Second, perhaps the most important change is the shift in people’s feelings about Japan’s future, from resignation to optimistic hope. However it is not at all clear that this new mindset will become deeply engrained and sustained. Third, we should distinguish between Abe as Prime Minister and Abenomics.