Japanese Economy in 2012-2013. The New Economic Policy

Abstract

S. Abe declared a program of renewal of economic policies and offered a number of new guidelines for the nation. The “New Deal” is badly needed because Japan has lost leadership in Pacific Asia after two decades of price deflation and economic stagnation. Japan’s demographic trends are unfavorable. Population is rapidly ageing, and the potential of economic growth based on domestic investment and consumer demand is low. Infusions of money from the state budget gave no positive effect and merely increased the public debt. The program presented by S. Abe, named “abenomics”, sets goals and gives guidelines for overcoming deflation. It is a pledge to create new fields for domestic capital investment and to return the economy to the course of economic growth.