Abstract

This article explores the economic governance of Japan’s Abe Administration, focusing on the Abenomics era initiated in 2012 to address prolonged economic challenges. Abenomics, comprising monetary expansion, fiscal stimulus, and structural reforms, aimed to rejuvenate Japan’s stagnant economy. The analysis scrutinizes the complexities of government expenditure, the impact on inflation expectations, and the nuanced relationship between monetary policy and consumer behavior. Despite a surge in stock prices, the tangible impact on consumption patterns remained limited, raising questions about the efficacy of such measures in fostering sustained economic growth. The article analyzes the challenges posed by negative interest rates and the potential implications of structural reforms, particularly in relation to Japan’s financial burden. Drawing parallels with Japan’s experiences, the article extracts valuable lessons, emphasizing the importance of balancing short-term economic stimuli with long-term fiscal sustainability. It highlights the adaptability of monetary policies to contemporary economic realities and underscores the need to evaluate the effectiveness of structural reforms in addressing societal and labor market dynamics. On a global scale, the article discusses the unique approach of Abenomics in the aftermath of the 2008 financial crisis and its potential lessons for nations facing similar challenges. It emphasizes the delicate balance between state intervention and market forces, urging policymakers to navigate this balance with societal consensus and long-term sustainability in mind.