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U.s. Japanese Government Policies Essay

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Introduction The purpose of this research is to evaluate the effectiveness of a set of the recent Japanese government policies. Before China overtaking the second largest economy in the world in 2011, Japan has kept the position for several decades. However, after the housing bubbles burst in 1990s, Japan had economically struggled where it can no longer grow at such a substantial rate as previously. In fact, its economy had shrunk when other neigbouring economies, such as Taiwan and South Korea, had prospered. So Abe Shinzo was elected as the prime minister of Japan and he has tried to revive the economy under Abenomics; yet, its impacts on the real economy seem ineffective until recently. This is why I think it will be interesting to evaluate whether Abenomics was the best option for Japanese government for reviving the economy from the prolonged recession. Was Abenomics effective? Research questions are as follows: A) Were the uses of monetary and fiscal policies effective during recession in Japan? B) Will the structural reforms be effective solution for Japanese economy? I will examine the effectiveness of Abenomics by looking at the historical economic data in Japan from 1980 to 2015. In addition, I will introduce some of literatures and relevant books to support my view on Abenomics. Literature review Japan’s lost decade Hayashi and Prescott (2002) conducted a study on Japan’s lost decade to provide a new interpretation based on neoclassical growth model.
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