Making sense of Abenomics

By Despoina Kanta

📚 Despoina Kanta is a Political Scientist and the author of the book “Strategic Management for Political Parties” (Greek title: Στρατηγικό Management για Πολιτικά Κόμματα)

For many years, Japan’s economy has been facing the phenomenon of deflation, with the prices of goods and services following a significant downward trend. The results of deflation were to present serious economic challenges for Japan, challenges that the late Prime Minister, Shinzo Abe, aspired to manage.

Having been elected twice, as a leader of the Liberal Democratic Party, Shinzo Abe served as Prime Minister from 2006 to 2007 and from 2012 to 2020. In his attempt to deal with the economic downturn that had formed in his country, proceeded with the implementation of an economic strategy, also known as “Abenomics”.

As a Prime Minister, Abe announced a three-pillar economic reform agenda at the end of 2012 and made changes according to corporate taxation, the agricultural sector, the labor market, the health system, etc. However, in the process of implementing these policies, the Abe government faced a series of problems that significantly delayed both the adoption of the reforms and the results they were expected to bring to Japan’s economy. 

As is well known, an economic recovery requires a multifaceted approach. The 6% decline in the labor force over the past decade was one of the main challenges for Abe’s economic policy, as everything pointed to the demographic decline over the next 50 years resulting in the loss of 1/3 of the population. As a result, intensive government engagement with enhanced support for the family and population growth was deemed necessary. Education and childcare were also prioritized, while significant funds were committed to offering free pre-school education for young children.

Abe also tried to correct the flaws in Japan’s employment practices, placing special emphasis on temporary workers who lacked job stability, with the main goal of limiting excessive work hours and avoiding the health problems they could cause. Abe’s reforms resulted in a significant reduction in the unemployment rate in 2017, which indicated an improvement in the labor market situation.

But how did Abenomics intend to do all that?
Αbenomics is essentially a complete economic recovery plan devised to deal with entrenched economic difficulties in Japan. Central to this strategy are three key pillars, three key “arrows”:

In 2013, therefore, the Japanese prime minister presented the comprehensive economic plan “Abenomics” to address this long-term inflation challenge. Abenomics focuses on (1) fiscal expansion, including deliberate increases in government spending on infrastructure projects, such as roads and educational infrastructure, (2) monetary stability, where the central bank -the Bank of Japan- implements policies aimed at reducing interest rates and increasing the availability of credit, and (3) structural reform, a focused pillar broad reforms designed to rehabilitate and improve the overall system and the use of the Japanese economy to improve the situation, and new trade agreements with foreign countries.

Through Abenomics, Japan sought to encourage more people to consume goods and services to boost domestic demand. At the same time, there remains a demand to stimulate overall economic growth, which is usually measured by the expansion of the gross domestic product (GDP). In addition, Abenomics aimed to drive prices to a relatively high level to maintain a stable and healthy economic environment.

After four years of implementing Abenomics, Japan’s economy showed some small signs of improvement, but inflation had not reached the desired levels and concerns about the country’s ever-increasing debt obligations remained. Alongside, new concerns had also arisen about the feasibility and potential risks.

Why did Abenomics become popular?
Abenomics soon gained publicity for many reasons. The first reason was, as we said above, (1) the economic stagnation that Japan was experiencing, which was in a period of extensive and prolonged economic stagnation and deflation. Another reason was (2) the re-election of Shinzo Abe in 2017, which was translated as a vote of confidence by the Japanese people not only in Abe as a person but also in his economic policy.

In addition, (3) a series of reforms involving tax cuts, various labor market modifications, and support for working families were seen as critical both to addressing deep-rooted issues in Japan’s economy and to improving society’s resilience and adaptability. In 2017, a significant reduction in the unemployment rate was observed and hopes for the creation of a favorable framework for the labor market and the general economy were revived. In relation to society as well, the economic policy of Abe gave special importance to (4) the strengthening of gender equality, with the main priority being increasing women’s participation in the workforce. The Japanese government even used examples from other countries, such as Sweden and Denmark, where similar policies were implemented and there was a significant improvement in female employment rates and fertility rates. Thus, Abenomics aimed both at social and economic empowerment of equality.

It could be said that Abenomics gained significant popularity due to the multidimensional way in which it aimed and approached the economic problems of the economy. After all, the sectors of the economy and society are two interrelated and closely related sectors. For this reason, Abe’s economic policy seems to have been structured around the logic of consolidating not only economic indicators but also social issues. Even if the implementation faced delays, even if, as an economic policy, Abenomics was met with suspicion at the beginning, it managed to prove that a sustainable and constantly growing economic future is a matter of a healthy society.


  1. James McBride, Beina Xu. (2018). Abenomics and the Japanese Economy. Council on Foreign Relations Available here: 
  2. Arianna C. Johnson (2021). Abenomics’ Effect on Gender Inequality in Japanese Society and the Workplace.Georgia Southern University. Available here:

Emma Dalton (2022). Was Abe Shinzo’s Womenomics Policy Good for Women or the Economy?. Australian Institute of International Affairs. Available here:

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