Has Abe boosted Japanese confidence enough to get out of stagnation? An early evaluation of Abenomics

Sammanfattning: The Japanese economy has since the beginning of the 1990’s suffered from a prolonged period of economic stagnation. Known as the Lost Decade, but extending its influence well into the 2000’s and beyond, many attempts has been made to reverse the stagnation. The latest of these has come to be known as Abenomics and is headed by incumbent Prime Minister Shinzō Abe. In this essay we investigate whether the economic policies under Abenomics have boosted economic confidence in Japan enough to reverse the stagnation. Our findings support that Abenomics have had strong effects on both consumer confidence as well as business confidence. Both types of confidence rose sharply in response to its policies and were accompanied by sizeable increases in both consumption as well as investment, contributing to increased growth in GDP and improvement in unemployment. Deflation has been reversed into a positive rate of inflation for the first time in decades. While it is too early to definitely say whether or not Abenomics is the cure needed to end the Japanese economic stagnation, the preliminary outlook is very promising.