Polling by newspapers (such as Reuters [October, 2014] and Wall Street Journal [August, 2014] for example) are negative about Japan's Abenomics and the expectations are getting worse.

Abenomics as defined by Wikipedia:

Abenomics refers to the economic policies advocated by Shinzō Abe since the December 2012 general election, which elected Abe to his second term as Prime Minister of Japan. Abenomics is based upon "three arrows" of fiscal stimulus, monetary easing and structural reforms.

Forecasts for Japan economic grow from March 2014 to March 2015 dropped from 0.5% to a 0.2%. Lower than the official expectation of 1.2% increase.


  • Is it correct to think Abenomics has failed? (Or is it working as expected?)
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    For any others who wonder what Abenomics is: The Economist characterized the program as a "mix of reflation, government spending and a growth strategy designed to jolt the economy out of suspended animation that has gripped it for more than two decades." - source: Wikipedia Oct 23, 2014 at 10:04
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    It would improve the question to cite a couple of those newspapers and give a summary of their main arguments for failure.
    – user4012
    Oct 23, 2014 at 13:17
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    Short version: main precepts of it were showing positive trends (too early to claim "working") but were severely set back by much-criticized VAT tax that negatively impacted the economy and the full shutdown of all nuclear power plants post-Fukushima that made carbon fuel importation into a major drag on the economy as well.
    – user4012
    Oct 23, 2014 at 13:21
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    This question might have some potential if it were fleshed out and given some context. Instead of asking if something failed ask if a specific goal has been breached or the changes have made it so such a goal is not likely to be reached or approached following the policy. So context to show that the goal you are comparing was proposed as a result prior to the installment is important too. Oct 24, 2014 at 0:52

2 Answers 2


Is it correct to think Abenomics has failed? (Or is it working as expected?)

Answer with some hindsight: August 2017

Growth of the GDP in Japan is positive now for the last 1.5 years, unemployment has continued to fall to below 3%, balance of trade has improved and is now positive, inflation remained largely positive since 2013, the government budget deficit is at 5% of GDP (was worse before) and the total debt ratio has levelled at around 250% of the GDP.

This is overall a quite positive development. One can therefore clearly state that Abenomics has not failed (so far)! It would indeed be incorrect to think it has.

However, it is very difficult (and probably still too early) to judge how much part (if any at all) it had in the economic recovery. Unfortunately we haven't a direct control experiment where everything is the same except for Abenomics. The debate about this has to be led by economic scholars.

My gut feeling: The Japanese economy would have recovered anyway but maybe at a slower pace and the government has added considerably to an already quite large pile of debt which means potential trouble in the future. Since this was more or less part of realistic expectations about the strategy, one could conclude that it is more or less working as expected (including up- and downsides).


TL;DR: The answer will depend on 1) whether Japan manages to achieve higher growth rates in the coming years and 2) which economists you ask.

"Success" could have many definitions here, depending on what goals and objectives were are talking about and on what timescale. Since it is an ongoing policy, there is always the possibility that resulting performance will improve over time. Performance could be defined according to real GDP growth, employment, inflation targets, or a number of other criteria. And an improvement in performance alone may not imply a causal relation to the policies in place.

With all these complexities in mind, it is fair to say that while Abenomics may have been successful up to a point, there is some debate about this, and it is also not expected to resolve the relatively low economic growth and other problems faced by Japan.

Here is a paper from 2014:

We show that Abenomics ended deflation in 2013 and raised long-run inflation expectations. Our estimates suggest that Abenomics also raised 2013 output growth by 0.9 to 1.8 percentage points. Monetary policy alone accounted for up to a percentage point of growth, largely through positive effects on consumption. In both the medium and the long run, Abenomics will likely continue to be stimulative. However, the size of this effect, while highly uncertain, thus far appears likely to fall short of Japan’s large output gap. In part this is because the Bank of Japan’s 2 percent inflation target is not yet fully credible.

However another 2014 paper looks specifically at the history of disaster recovery and concludes that:

[...] government policies have failed to lift Japan's GDP to the expected level. Even with the help of Abenomics, the gap remains in the range of 6 to 14 trillion yen per year.

Another negative point from 2015:

Prime Minister Shinzo Abe’s economic stimulus package, Abenomics, depreciated the yen sharply from the end of 2012, which was expected to have a positive impact on Japan’s trade balance. Contrary to the J-curve effect, however, Japan’s trade balance has not shown any signs of improvement, even though two years have passed. There is a growing concern that Japanese firms might lose their export competitiveness in the global market.

Overall, here is a pretty good summary of where things stood as of 2016:

Has the Abenomics failed? Or can Abenomics eventually pull the Japanese economy out of the low growth that has characterized most of the last 20 years? The answer hinges on the success of the growth strategy part of Abenomics, which is referred to as the third arrow. Even if the first two arrows of Abenomics (bold monetary policy and flexible fiscal policy) eventually turn out to be successful, the best they can achieve is to fix the demand shortage and eliminate the output gap. Indeed the expansionary macroeconomic policies in the first three years of Abenomics have significantly changed the inflation expectations and narrowed the output gap, but the economy continued to stagnate. In order for Japan to escape the long

  • term stagnation and achieve a higher potential growth, the growth strategy part of Abenomics needs to be successful.

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