What is Abenomics ?

What is Abenomics ?
0 comments, 13/01/2014, by , in Business, Economy

Abenomics is a term coined by the English-speaking reporters to indicate the new economic and financial policy chosen by the Japanese Liberal Prime Minister Shinzo Abe for economy after two decades of stagnation or recession in the country of the Rising Sun.

Abenomics system

Abenomics system

In this period, the Bank of Japan had used only the weapon of interest rates close to zero. The only viable solution, according to the newly elected Prime Minister Shinzo Abe is a brutal shock . To put it succinctly, he proposed to say enough to be prudent, to prefer an expansionary monetary policy , a public investment that does not care about the debt they produce. It measures only growth. The problems of public debt will be expected later, now what’s most important is to get the country out of the crisis.

The gear change has allowed for the first time the Japanese economy to grow in the first quarter of 2013, marking a 3.5% of GDP on an annual basis. This growth is built almost entirely on the renewed confidence of consumers who have returned to spend as they did in the best years. And it is also booming the stock market: the stock market has returned to running, growing by 70% in a few months ( the Nikkei index is now at 2007 levels ) . They are more cautious companies, which now have content for their investments.

What do you think of Abenomics ? Opinions are varied:

* In the United States it is the prevailing perplexity. But it is true that the Japanese government bond rates are falling , and since the country’s public debt is 90 % owned by the Japanese themselves , it is expected that at least 10 % of them will sell their national titles to look for the most profitable investments in other countries – thus giving a boost to the economy of other countries also .

* According to some analysts, the renewed growth of Japan is illusory, because the population is too old and it is already late to be able to raise the birth rate.

* Credit Suisse issued a report in which it explains why it makes sense to invest in Japan : the devaluation will be able to boost exports , the GDP will grow at a rapid pace , companies will have ample room for growth because they were accustomed to low productivity .

* It is still doubtful that it is a junkie growth, not supported by appropriate structural reforms.

The Abenomics stands as the third option between the rigor and European -style vaguely socialist economic plans of the U.S., but it is the only road that led to tangible results – at least for the moment.

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