Abenomics, the popular term for the economic policies of new Japanese Prime Minister Shinzo Abe, is likely to fall far short of its goals of reviving long-term vitality in Japan, although it could succeed in providing a temporary and illusory lift to both the economy and Abe's Liberal Democratic Party. To provide a lasting revival, Japan needs a three-pronged approach of monetary stimulus, the right kind of fiscal stimulus, and structural reform. None of the three work without the other two. Abe, however, is focused only on the first two. With his party just back in power, he doesn't want any reforms that step on toes. As a result, Japan is more likely to do what it has repeatedly done after previous bouts of stimulus: fall back into lethargy as soon as the stimulus is withdrawn.
展开▼
