Abenomics

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Japan's Prime Minister Shinzō Abe (2014)

The term Abenomics ( Japanese ア ベ ノ ミ ク ス Abenomikusu ; analogous to Reaganomics ) is a suitcase word composed of "Abe" (last name of the current Japanese Prime Minister ) and " economics " (English for economics) and names Shinzō Abes policy that began in January 2013. Since taking office, the second and third Abe governments have tried to break through Japan's economic crisis with the help of economic stimulus programs , an enormous glut of money and far-reaching deregulations . Since 1990, triggered by the bursting of the bubble economy on the stock and real estate market , the country has experienced consistently lower growth rates than in the previous decades. Whether deflationary tendencies are a cause (or main cause) of this throttling was and is controversial.

Election campaign and coalition formation 2012

On 16 December 2012, had Liberal Democratic Party (LDP) in the Shugiin-election in 2012 , the majority in Shugiin won (Parliamentary Lower House) and formed a government coalition with the Kōmeitō . Abe thus had the necessary parliamentary backing to keep essential elements of his campaign promises. Abe was elected Prime Minister by both Houses of Parliament on December 26; he and the cabinet were appointed by Emperor Akihito that same day . Already at the constitutional cabinet meeting, Haruhiko Kuroda - an economist who caused a sensation across the country for his demands for a policy of cheap money - was appointed the new head of the central bank and thus the monetary architect of the reform policy.

The three pillars of Abenomics

The strategy is based on three pillars:

1. Continuing glut of money

Since the collapse of Lehman Brothers, the Japanese central bank has increased the money supply by almost 600%. For comparison: the US Federal Reserve let the dollar volume swell by over 400% in the same period; the ECB only increased the euro volume by around 25%. While the FED began to cut back on its bond purchases, i.e. its policy of “printing money” - called quantitative easing - since the beginning of 2014, the Japanese central bank is expanding it, above all to bring about an inflation rate above the 2 percent mark.

2. Credit-financed economic stimulus programs

A kind of debt limit was declared “flexible” especially for this purpose, in order to make “double-digit” budget deficits possible. In the 2014 budget, for example, the deficit is expected to be over 10% of gross domestic product .

3. Reforms and deregulations

Society, the legal system and the labor market are to be comprehensively reformed in a business-friendly direction. An exemplary target is the increase in society's productivity through a significantly higher employment rate of women. Pensions - like direct taxes - are to be reduced; the indirect taxes (especially VAT ) should be increased. The government, unlike the EU or the USA , wants to deregulate the financial sector and its products . The aim is to make Japan, its companies and its financial centers more attractive to foreign investors.

Effects

The program temporarily increased confidence in the Japanese economy and population. However, after initial highs, the Nikkei 225 collapsed sharply. The opportunities and risks of Abenomics are controversial in society and among economic and stock market experts. A financial overstepping up to national bankruptcy, the loss of confidence in the capital markets and the associated sustained price crashes and a deep (global) economic crisis are considered possible; UBS banker Alexander Friedman coined the term Abegeddon (alluding to Armageddon ) for this scenario .

criticism

Over-indebtedness

Although Japan's national debt in 2013/14 was a high 250% of GDP , there were still no financing problems. On the one hand, the national deficit is (currently) mainly financed by the Japanese central bank ( BoJ ) , on the other hand, the interest burden for ten-year government bonds, for example, is low (at 0.6%). In order to escape from the deflationary development and stimulate economic growth, Abe and his party decided to adopt a radical expansionary monetary and fiscal policy (deficit spending) and to devalue the yen in order to stimulate foreign demand. Since Japan has been increasingly dependent on (now more expensive) energy imports since Fukushima 2011, companies have higher production costs at the same time. In principle, companies rarely give deflation-reducing (necessary) wage increases.

Bundesbank to increase VAT

As early as August 2013, in its monthly report , the Bundesbank expressed open skepticism towards Japanese economic policy in general and the increase in value added tax from 5% to 8% planned for April 2014 and now introduced. This increase could lead to a slump in consumption and thus to a decline in industrial production and even intensify the long-term downward trend. Indeed, Japan's GDP contracted sharply again; in the second quarter of 2014 by minus 1.7% (compared to the previous quarter) and by minus 6.8% compared to the same quarter of the previous year. In the 2014 Shūgiin election , Abe was able to have his economic policy confirmed again by the people.

Web links

Individual evidence

  1. ↑ FAZ.net July 21, 2013: Japan's Prime Minister threatens resistance from his own party (accessed on October 9, 2014).
  2. ↑ Quantitative and Qualitative Monetary Easing . Bank of Japan. Retrieved December 17, 2014.
  3. ↑ BOJ Gov Kuroda: BOJ Easing Policy Not Targeting Exchange Council . In: The Wall Street Journal , April 12, 2013. Retrieved December 17, 2014. 
  4. ↑ Nikkei jumps to 53-month high as Kuroda seen likely next BOJ chief . February 24, 2013. Archived from the original on March 21, 2013. Retrieved on December 17, 2014. 
  5. ^ Election result ( memento of October 29, 2008 in the Internet Archive ) on the LDP website.
  6. ↑ Why Abenomics fails - and what it means for us , Daniel Stelter, manager-Magazin.de, February 28, 2014 (accessed October 9, 2014)
  7. ↑ Haidar, JI and Hoshi, T. (2014), Stanford University FSI Working Paper, June 2014 .: Implementing Structural Reforms in Abenomics: How to Reduce the Cost of Doing Business in Japan ( Memento of the original from July 14, 2014 on the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. . @1@ 2Template: Webachiv / IABot / aparc.stanford.edu
  8. ↑ http://de.reuters.com/ , May 8, 2014 (last accessed October 11, 2014): Fed wants to normalize inflated balance sheets within 8 years .
  9. ↑ Stronger growth: Japan's "Abenomics" work in the first quarter at spiegel.de, May 10, 2013 (accessed on June 17, 2013)
  10. ↑ The prices collapse on Tokyo's stock exchange - “Abenomics” is shaking at wienerzeitung.at, June 13, 2013 (accessed on June 17, 2013).
  11. ^ Bernhard Bartsch: Jerk to the right. In: Berliner Zeitung. June 10, 2013, accessed June 21, 2013 .
  12. ↑ Handelsblatt, November 19, 2014: Recession despite Abenomics. Japan's failed money experiment. , last accessed December 28, 2014.
  13. ↑ Advisory Council on the Assessment of Overall Economic Development: Annual Report 2011/12 (PDF), p. 93, item 144: “De facto, there is basically no liquidity problem for these three countries [US, UK, JP], as they are only indebted in their local currency and, thanks to the support from the central bank, are able to create the money required for repayment themselves without restriction. And the situation cannot arise in which a temporary liquidity problem can develop into a solvency problem solely due to rising interest rates. "
  14. ^ The Wall Street Journal, June 18, 2014: Japan threatens to fall victim to its successful monetary policy .
  15. ↑ After the election of prime minister: Will Abe reverse the Japanese nuclear phase-out? FAZ, December 26, 2012 (accessed June 17, 2013).
  16. ↑ DW, March 10, 2014: Japan is growing more slowly than expected .
  17. ↑ Deutsche Bundesbank: Monthly Report August 2013 (PDF), p. 19: “A suspension of the wage-price spiral is just as impossible as a transition to galloping inflation processes. It is by no means certain whether these conditions are met in Japanese reality. On the one hand, it is questionable whether the necessary increase in wage growth in Japan can be generated within a few years in view of the rather low level of trade union power and the now quite high proportion of workers in precarious employment. "
  18. ↑ Deutsche Bundesbank: Monthly Report August 2013 (PDF), p. 17: "In the event of a sudden collapse in consumption and industrial production, the tax increase plans could intensify the downward trend."
  19. ↑ Wirtschaftsblatt, June 30, 2014: Japan: Difficult recovery after sales tax increase ( Memento of August 20, 2014 in the Internet Archive ).
  20. ↑ Wirtschaftsblatt, August 13, 2014: Japan is melting away the economy ( Memento from October 15, 2014 in the Internet Archive )
  21. ↑ Focus Magazin, September 15, 2014: It's going downhill. Japan on a kamikaze course with Prime Minister Abe .