Japan’s Economic Policy

In recent years a fundamental shift in Japanese official vision of its mid-term economic goals can be traced. Failure to accelerate economic growth, despite clear-cut commitment by late ex-PM Shinzo Abe to overcome decades-long stagnation, exposed inability of the government to secure sustainable demand-pull growth of the country’s GDP. Prolonged monetary expansion coupled with fiscal stimulus proved to be ineffective to boost private consumption and domestic investment to the extent necessary to achieve annual output growth of 2–3%. The specter of deflation still looms over Japanese economy despite surge in domestic prices. Public debt is growing, while gradual adjustment of policy rate by BoJ will add to the burden of debt servicing. Under such conditions the idea of putting ambitious targets for GDP dynamics and rehabilitation of public finances is being dropped. Instead, the task of protecting incomes and consumption from mostly external challenges and risks is increasingly drawn on to define goals of economic strategy. Incomes and employment are being proclaimed the highest priority when planning economic policies in midterm and long-term perspective. Related reforms and improvements are increasingly seen as a clue to the country’s competitiveness and to sustainable growth based on supply-side factors. Also, the notion of economic prosperity and wealth is being reconsidered to include criteria other than GDP or material assets. Abundance of intellectual and organizational resources with mechanisms for their constant improvement and utilization, ability to innovate and expand are named among alternative goals of economic strategy aimed at preserving and improving the country’s high international status

Consumption (sociology) · Debt · Deflation · Economic expansion · Economic recovery · Government (linguistics) · Investment (military) · Prosperity · Stimulus (psychology) · Sustainable Growth Rate · Asian Industrial and Economic Development · Economic Growth and Productivity · Japanese History and Culture

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