Japan's Growth Strategy and Structural Reforms in its Labor Market

Abstract

The recently wide-spreading disappointment at 'Abenomics,' following the meager outcomes of its first arrow, quantitative easing (QE), drew attention to the third arrow, a comprehensive growth strategy focusing on structural reforms in Japan. In other words, although the Abe Cabinet has steered its economic policies toward monetary expansion since April 2013, which further developed into a Negative Interest Rates Policy (NIRP) on February 2016, their impacts on the real sectors, particularly on private investment and consumption, have been utterly trivial. Furthermore, the second arrow of Abenomics, fiscal stimulus, has reached an impasse due to a huge fiscal deficit mainly resulting from low fertility rates and population ageing.