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Abenomics: A Change in the Concept

https://doi.org/10.24411/2658-6789-2020-10001

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Abstract

The article addresses recent changes in the views of the Japanese government, headed by Prime Minister Abe Shinzō, regarding the content and desired effect of its economic policy, which is presented to the public under the brand of Abenomics. The article highlights the major points of the economic credo proclaimed by the Japanese cabinet set up by the current leader of the ruling Liberal Democratic party after the Diet Lower House elections of late 2012. It presents the mid-term goals set by the new cabinet, as well as the principal macroeconomic tools that were meant to be mobilized by the cabinet in order to secure the achievement of these goals by means of modifying the tendencies which had solidified during the previous two decades, and bringing fresh stimulus and dynamism to the Japanese economy. The author briefly reviews the results of economic performance following several years of practicing Abenomics by the government and monetary authorities and possible explanations of the lack of significant progress in achieving the goals that had been initially set. The author traces the evolution of the priorities in the economic tasks formulated by the Abe cabinets, which have been shifting from stimulating demand and reflation to promoting growth of productivity through dissemination of new technologies and ensuring an adequate supply of labor resources. The article notes the reassessment in 2015-2016 of potential effectiveness of monetary policy instruments as a means of supporting and accelerating economic growth, as well as the awareness of limited potential of additional input of public funds through government efforts as a tool for invigorating investment activity in the economy. A change in priorities is pointed out, both in the public presentation of the government’s economic and social policies and, to a lesser extent, in their practical implementation, which was the logical consequence of the reevaluation of effectiveness of former tools. Recent government documents setting larger goals, in particular the annual Future Investment Strategy, are analyzed as a reflection of the new vision of the economic role of the state. This vision includes less concern for current short-term macroeconomic indicators and more responsibility of the government for the fundamental characteristics and quality of the resources laying the foundation for national economic activities. The article concludes that the Japanese government’s policy regarding social and business activities has been seriously adjusted to raise Japan’s global competitiveness and ensure conditions for long-term sustainable growth of its economy. The said adjustment includes the abandonment of the traditional “industrial policy” concept.

About the Author

V. G. Shvydko
National Research Institute of World Economy and International Relations of the Russian Academy of Sciences
Russian Federation


References

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Review

For citations:


Shvydko V.G. Abenomics: A Change in the Concept. Russian Japanology Review. 2020;3(1):5-21. (In Russ.) https://doi.org/10.24411/2658-6789-2020-10001

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ISSN 2658-6444 (Print)
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