How Inclusive Is Abenomics?

By Chie Aoyagi, Giovanni Ganelli, Kentaro Murayama

March 13, 2015

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Format: Chicago

Chie Aoyagi, Giovanni Ganelli, and Kentaro Murayama. How Inclusive Is Abenomics?, (USA: International Monetary Fund, 2015) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

We assess the ongoing reform efforts in Japan in terms of inclusive growth. We use prefectural level panel data to regress a measure of inclusive growth, which incorporates both average income growth and income inequality, on macroeconomic and policy variables. Our analysis suggests that achieving the Bank of Japan’s 2 percent inflation target has a positive effect on average income growth, but an adverse effect on income equality. The package of structural reforms planned under Abenomics is found to be effective in increasing both average income growth and income equality. The main policy implication of our analysis is that full implementation of structural reforms– especially labor market reforms–is necessary to both foster growth and increase equality.

Subject: Economic growth, Inclusive growth, Income distribution, Income inequality, Labor, National accounts, Personal income

Keywords: BoJ inflation target, Descriptive analysis, Economic growth, Global, Inclusive growth, Income distribution, Income equality, Income growth, Income inequality, Inflation rate, Japan, Labor market duality, Market income, Personal income, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/054
Stock No:

WPIEA2015054
ISBN:

9781498327312
ISSN:

1018-5941

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