abenomics
The Japan’s economy has been experiencing a decline or at a stalemate for the past couple of years. In the recent years, set of policies and reforms called Abenomics has been put into place by Shinzo Abe, the Japan Prime Minister, in order to help their economy.
Abenomics is referred to as the “Three Arrow Strategy”, a reference to a Japanese saying that a single stick is easier to break than three sticks.
Abenomics is referred to as the “Three Arrow Strategy”, a reference to a Japanese saying that a single stick is easier to break than three sticks.
(i) the first arrow
The first of three measures that make up Abenomics, the goal of the Bank of Japan (BOJ) monetary measures is to help maintain the stability of the prices in order to ensure the economy’s thorough development.
The prices of good and services is what determines what individuals and firms will invest in or consume. For example, in our daily lives, we will choose the cheaper option as compared to a more expensive option when there is not much difference in quality. Likewise, people are less likely to invest in Japan if Japan has high cost for labour and an unstable economy.
The fluctuation of prices will make it harder for companies and people to choose the better choice be it in investment or in consumption, good price stability would allow for the people to make the right decisions without the need to be troubled by the constant changes in the prices of everything. A lack of price stability may also affect the distribution of the income in the country. Thus, with so much at stake, the “price stability” has to be a sustainable one.
Another component of this measure set by the Bank of Japan is the “price stability target”, a guideline for the targeted inflation per year in order to ensure the lack of fluctuation in the prices. An inflation rate that is steady and dependent on the price stability whilst still at a viable basis will allow for the Japan’s economy to progress.
The prices of good and services is what determines what individuals and firms will invest in or consume. For example, in our daily lives, we will choose the cheaper option as compared to a more expensive option when there is not much difference in quality. Likewise, people are less likely to invest in Japan if Japan has high cost for labour and an unstable economy.
The fluctuation of prices will make it harder for companies and people to choose the better choice be it in investment or in consumption, good price stability would allow for the people to make the right decisions without the need to be troubled by the constant changes in the prices of everything. A lack of price stability may also affect the distribution of the income in the country. Thus, with so much at stake, the “price stability” has to be a sustainable one.
Another component of this measure set by the Bank of Japan is the “price stability target”, a guideline for the targeted inflation per year in order to ensure the lack of fluctuation in the prices. An inflation rate that is steady and dependent on the price stability whilst still at a viable basis will allow for the Japan’s economy to progress.
(ii) the second arrow
The Abenomics’ second arrow is also known as the “Robust” (kidouteki) Fiscal Policy. A simple explanation of what this means is that in order to help the Japan’s economy out of its slump, the government is spending more.
This policy can also be linked to policies that are managing the aging population in Japan. One of the reasons as to why more money is spent is to ensure that the country is able to cope with the aging population. The three areas where money is being spent is welfare, servicing the debt and public works. This is a move to help the lives of the people improve, to deal with the debt Japan has. Finally the last area where money is being invested in is mainly concerned with the infrastructure of Japan, in preparation for the Tokyo 2020 Olympics.
This policy can also be linked to policies that are managing the aging population in Japan. One of the reasons as to why more money is spent is to ensure that the country is able to cope with the aging population. The three areas where money is being spent is welfare, servicing the debt and public works. This is a move to help the lives of the people improve, to deal with the debt Japan has. Finally the last area where money is being invested in is mainly concerned with the infrastructure of Japan, in preparation for the Tokyo 2020 Olympics.
(iii) the third arrow
This part of the Abenomics is seeking to help the Japan economy grow by spurring private investors to invest more. To attract more private investors, Japan must have ways to attract people into investing into their country, thus this section of the Abenomics is consisting of a few measures taken by the Japanese government in order to help their economy grow. The third “arrow” will take longer to take effect than the others, but is by no means any less effective.
The first measure taken is to lower the corporation tax by 2.4%. A high corporation tax would result in it being harder for business in the country as it means that there will be less profit made by the companies. Therefore, the Japanese government has lowered the corporation tax in order to make it easier for companies, and also attract more investors as a lower corporation tax is bound to make business easier for the private investors.
The second measure is something is concerning something that is going on throughout the world, female labor participation. In this modern society, it is not frowned upon for females to be working as well, in fact, it is actually very common. Females are part of the population too, and for them to work as well will be helping the economy to improve. However, for Japan,couple in with a declining birth rate and workforce, many of their females do not work, making the work force even smaller that it already is. In an effort to increase the workforce as well as try to provide more child care workers, this policy is put into place.
Japan is planning on opening their doors more, doing something many countries are already doing- bringing in foreign talents. They are trying to be more willing to accept foreigners into society and attract more foreign students to join Japanese universities. They are not only trying to bring people in, but the Japanese government is also making a conscious effort to have the Japanese students study overseas on scholarships.
Another part of the third “arrow” measures is venturing into a very lucrative source of income. Tourism and export of local products. Japanese food and items are well known to be good, so the Japanese government are trying to export their products such as Japanese food to other parts of the world. This measure is also trying to help increase inbound tourism. This is to be achieved through the less strict visa restrictions along with having tax-free shopping.
The last of the five measures taken is to lower the restrictions. This implies that Japan is looking for foreign investors as well as looking to trade with other countries. Free trade is now happening in Japan and the Japanese government are having less restrictions on foreign investments in Japan.
The first measure taken is to lower the corporation tax by 2.4%. A high corporation tax would result in it being harder for business in the country as it means that there will be less profit made by the companies. Therefore, the Japanese government has lowered the corporation tax in order to make it easier for companies, and also attract more investors as a lower corporation tax is bound to make business easier for the private investors.
The second measure is something is concerning something that is going on throughout the world, female labor participation. In this modern society, it is not frowned upon for females to be working as well, in fact, it is actually very common. Females are part of the population too, and for them to work as well will be helping the economy to improve. However, for Japan,couple in with a declining birth rate and workforce, many of their females do not work, making the work force even smaller that it already is. In an effort to increase the workforce as well as try to provide more child care workers, this policy is put into place.
Japan is planning on opening their doors more, doing something many countries are already doing- bringing in foreign talents. They are trying to be more willing to accept foreigners into society and attract more foreign students to join Japanese universities. They are not only trying to bring people in, but the Japanese government is also making a conscious effort to have the Japanese students study overseas on scholarships.
Another part of the third “arrow” measures is venturing into a very lucrative source of income. Tourism and export of local products. Japanese food and items are well known to be good, so the Japanese government are trying to export their products such as Japanese food to other parts of the world. This measure is also trying to help increase inbound tourism. This is to be achieved through the less strict visa restrictions along with having tax-free shopping.
The last of the five measures taken is to lower the restrictions. This implies that Japan is looking for foreign investors as well as looking to trade with other countries. Free trade is now happening in Japan and the Japanese government are having less restrictions on foreign investments in Japan.
impact on population growth in japan
Japan’s population can be influenced by many things, birth rates as well as people migrating to Japan. There are many other factors like the standard of living and their education system that can influence the population of Japan, however, based on analysis of the economic policies, it can be observed that these policies are able to help the declining population in Japan to grow.
Firstly, the economic policies in Japan seek to make Japan a more attractive place for foreign investors to invest in and for people to live in. These two portions of the economic policy is looking to attract people to Japan. With foreign investors come more job opportunities, bigger companies will likely send people over to work in Japan, or people may come Japan to look for job opportunities and they may decide to stay permanently.
The new economic policies of Japan can aid the population growth due to influx from foreigners. Japan is opening their doors to more foreigners and hope that they are able to bring in foreign talents, which will be able to help sustain the economy as well as the working population. Once they start working here, they may develop a sense of belonging in Japan, the place where their work is. Eventually, after many years of contributing to the economy they are likely to get married and produce children, thus in the long run, this will benefit Japan by helping them increase their population. There are two benefits to this, first is the short term one where they gain more foreign talents to sustain their economy and the second where these foreign migrants will get married and have children that are Japanese citizen effecting the population.
However, there is also a downside of these economic policies. This downside is concerning the third “arrow”. That is, having more Japanese females join the working population. This indeed will help in the economic situation in Japan and help increase the working population for a short period of time. Despite how much benefits there are to having more females work, it is likely that Japan will too experience the same problems as many countries today are experiencing. That is, females are marrying later due to work commitments and thus leading to less time to have children and thus a lower birth rate. In the long term, this is likely to affect the already declining population of Japan.
Firstly, the economic policies in Japan seek to make Japan a more attractive place for foreign investors to invest in and for people to live in. These two portions of the economic policy is looking to attract people to Japan. With foreign investors come more job opportunities, bigger companies will likely send people over to work in Japan, or people may come Japan to look for job opportunities and they may decide to stay permanently.
The new economic policies of Japan can aid the population growth due to influx from foreigners. Japan is opening their doors to more foreigners and hope that they are able to bring in foreign talents, which will be able to help sustain the economy as well as the working population. Once they start working here, they may develop a sense of belonging in Japan, the place where their work is. Eventually, after many years of contributing to the economy they are likely to get married and produce children, thus in the long run, this will benefit Japan by helping them increase their population. There are two benefits to this, first is the short term one where they gain more foreign talents to sustain their economy and the second where these foreign migrants will get married and have children that are Japanese citizen effecting the population.
However, there is also a downside of these economic policies. This downside is concerning the third “arrow”. That is, having more Japanese females join the working population. This indeed will help in the economic situation in Japan and help increase the working population for a short period of time. Despite how much benefits there are to having more females work, it is likely that Japan will too experience the same problems as many countries today are experiencing. That is, females are marrying later due to work commitments and thus leading to less time to have children and thus a lower birth rate. In the long term, this is likely to affect the already declining population of Japan.