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How Inclusive Is Abenomics?

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  • Ms. Chie Aoyagi
  • Mr. Giovanni Ganelli
  • Kentaro Murayama

Abstract

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.

Suggested Citation

  • Ms. Chie Aoyagi & Mr. Giovanni Ganelli & Kentaro Murayama, 2015. "How Inclusive Is Abenomics?," IMF Working Papers 2015/054, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2015/054
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    Cited by:

    1. Sonali Jain-Chandra & Tidiane Kinda & Kalpana Kochhar & Shi Piao & Johanna Schauer, 2019. "Sharing the Growth Dividend: Analysis of Inequality in Asia," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(12), pages 5-28, September.
    2. Farhad Taghizadeh‐Hesary & Naoyuki Yoshino & Sayoko Shimizu, 2020. "The impact of monetary and tax policy on income inequality in Japan," The World Economy, Wiley Blackwell, vol. 43(10), pages 2600-2621, October.
    3. J. Boeckx & P. Butzen & N. Cordemans & S. Ide, 2015. "Deflation in Japan, Abenomics and lessons for the euro area," Economic Review, National Bank of Belgium, issue i, pages 100-124, June.
    4. Raihan, Selim, 2021. "Functional Income Distribution and Inequality in the Asia-Pacific Countries," MPRA Paper 110469, University Library of Munich, Germany.

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