Lucy Ward- Junior
Marshall University
Huntington, WV
April 3, 2014
Abenomics
Japan is known as the world’s third largest economy, but has struggled for many years
to rebuild itself. In 2012, Shinzo Abe was re-elected Prime Minister. Upon entering his term as
Prime Minister, Abe was faced with the challenge of repairing the stagnant Japanese economy.
His goal was to revive the lifeless Japanese economy by boosting Gross Domestic Product and
inflation with three arrows of focus: monetary expansion, fiscal stimulus, and structural reforms.
His plan is known as ‘Abenomics’. Japan’s economy needed a reform, but how well is Abe-
nomics tackling the problems of deflation, an aging work force, and the shift in offshore manu-
facturing? In this paper I will analyze Abe’s reforms, their successes and impacts on current
problems in the Japanese economy.
First, I will explain how the Japanese economy has been floundering in the past two
decades. During the 1980’s, the Japanese economy was flourishing and growing rapidly. In the
following decade, economic growth drastically slowed and the Bank of Japan continued to let
the economy deflate. Real Gross Domestic Product rapidly declined from 4.0 percent change in
growth from the 1974-1992 average to -0.2 percent change in growth from the 2008-2012 aver-
age. Unemployment has doubled from 2.3 percent in the ’74-’92 average to 4.6 in the ’08-’12
average (Hausman). Japan’s most recent low was in 2009 when actual real GDP plummeted
below 95. Previous Prime Ministers have had no effect on the declining GDP of Japan, until Abe
took the platform and gave hope to an economy in desperate need of change.
Ward 1
Monetary expansion is the arrow of Abenomics that has captured world-wide attention
