Monetary Economic: Abenomics and its First ArrowMonetary Economic: Abenomics and its First Arrow
Since the early 1990s, Japan has faced a daunting series of economic challenges, including slow growth, rising public debt, deflation, weak asset prices, and declining international competitiveness. Japanese policymakers have deployed a wide array of measures to combat these challenges, but have failed to end deflation, stanch deficit spending, or reignite growth.
“Abenomics” is the latest attempt to change Japan’s fortunes. Named for current Prime Minister Shinzo Abe, it is a comprehensive strategy that is meant to reverse deflation and rekindle growth through the combined use of monetary, fiscal, and structural policies. In an era of slow global economic growth, the success or failure of Abenomics will have profound implications not only for Japan but for regional and global economies, including the United States.
In early 2013, Japan enacted a monetary regime change. The Bank of Japan set a two percent inflation target and specified concrete actions to achieve this goal by 2015. Shinzo Abe’s government is supporting this change with fiscal policy and structural reforms.
His economic program (dubbed ‘Abenomics’) consists of monetary expansion, fiscal stimulus, and structural reforms. In a reference to a Japanese legend, these components are referred to as three arrows The first arrow is a monetary policy regime change. Beginning in November 2012, then candidate Abe argued that that the Bank of Japan should increase its inflation target and engage in “unlimited easing.”
The second arrow is fiscal policy. In February 2013, the Diet passed a two percent of GDP “supplementary budget”
The third arrow consists of structural reforms to increase Japan’s potential GDP growth. The proposed reforms are thus far mostly vague, but include relaxations of labour market rigidities, less protection for farmers, and utility deregulation
This dissertation will focus primarily on the first arrow of Abenomics, the monetary policy regime change. Monetary policy is the most clearly defined element of Abenomics. It is also the newest and most radical.
In the medium and long-run, Abenomics will likely continue to be stimulative. But the size of this effect, while highly uncertain, thus far appears likely to fall short of Japan’s large output gap.
The goal of this dissertation is to determine the monetary tools used, the effectiveness of the tools, the progress of Adenomics thus far, how to interpret the effects and result going forward and the possible backlashes if any on Japan and other major economies (EU, US etc.).
****Roughly about 16,000 words for the entire dissertation, and I have done up the first 4500 words (introduction & stuff), thus only 11,500 words more to go. UK style dissertation with proper referencing****
1. Think about your research question. What is it exactly that you are interested in studying, within the broad area that you have identified? You have to narrow down your research interest to a manageable research question or two.
2. Think about data that you need to get to analyse/test your research question(s). Think about the data source. Is it going to be a micro-level (i.e. firm-level) or macro-level (country-level) data? This is important as the feasibility of data sometimes dictates to us what can and cannot be done.
3. Think about the research method. Appropriate research method would depend on the nature of the research question and data, i.e. points 1 and 2 above. Is it going to be a case-study or a quantitative statistical analysis?
Monetary Economic: Abenomics and its First ArrowMonetary Economic: Abenomics and its First Arrow Paper details Background Summary Since the early 1990s, Japan has faced […]