Nicholas Spiro in this article discusses about the famous economic policymaking technique of Japan's longest serving Prime Minister, Shinzo Abe. He tells about the three famous and radical arrows of Abenomics namely monetary easing, fiscal expansion and structural reforms; which were designed to rescue Japan from the two decade long stagnant and unstable financial market back in 2012. Among these "three arrows", the idea of "loose monetary policy" was considered as the most radical and hence was publicized the most. Implemented by the Bank of Japan, the policy focussed on "yield-curve control". Although the policy seemed to work amazingly, yet the few policy blunders and external shock always casted shadow over it's credibility, design and implementation.
The policy was however given a new life because of the COVID crisis. The policy is not only strongly favoured by Bank of Japan governor Haruhiko Kuroda, but given the other two arrows are wholeheartedly embraced by the policymakers across the globe, puts it in a strong position. Similar to Japan, big central banks have gone “all in” to counter the economic fallout from the coronavirus which is a sight of shock as well as awe for many. The author then goes on to say how the Japanification of economic policy making has happened in few countries during this pandemic.
The author then goes on to tell how it is the failures of Abenomics which are stopping it from being implemented in other major economies. The main criticism was the policy's error to allow a rise in Japan's consumption tax to go ahead in 2014. This was not only the reason to tip the economy into recession but also made the public more skeptical and difficult to convince that the good days of stronger growth and inflation are down the road.