Restoring Japan: Abenomics

  • Reference: ECON-421-E

  • Year: 1985-2016

  • Number of pages: 24

  • Geographic Setting: Japón

  • Publication Date: May 2, 2016

  • Source: IESE (España)

  • Type of Document: Case

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The case presents Prime Minister Shinzo Abe, whose economic policies, nicknamed "Abenomics," aim to remedy the economic malaise Japan has suffered since the 1990s. The case then jumps back to that era and describes the circumstances that surrounded the beginning of this "lost decade" and the actions of the Japanese authorities of the time in response to it. Those actions failed to prevent stagnation, which has plagued the Japanese economy ever since. The case then returns to 2015 and examines Abe's three-pronged economic policy, built around monetary, fiscal, and structural reforms. The case describes the performance of the Japanese economy alongside these main policy lines, opening the discussion of whether Abe's policies will finally be able to create sustained growth after many failed attempts by several previous Japanese administrations.Winner of the 2020 Research Excellence Award granted by the IESE Alumni Association, in the category "Best case".

Learning Objective

The case aims to examine how monetary and fiscal policies work in an open economy with a flexible exchange rate. The Japanese crisis is a good, "textbook" example of the boom-bust cycle seen in other advanced economies, and it shares many characteristics with other economic shocks, such as the Great Recession that started with the financial crisis of 2007-2008. As a result, the case may easily be used to lay a foundation that can then be used to discuss other, similar recessions, as well as the response of public powers and supranational organizations to these crises.


Asset Bubble Central Bank Japan Lost Decade Recession Zero Lower Bound