The growth strategy of Abenomics and fiscal consolidation

Kensuke Miyazawa and Junji Yamada

Journal of the Japanese and International Economies, 2015, vol. 37, issue C, 82-99

Abstract: Using a general equilibrium model with an overlapping generation structure, this study examines the impacts of a new Abenomics growth strategy on fiscal consolidation in Japan. Our simulation yielded the following results. (i) It is difficult to achieve the government target of fiscal consolidation by the year 2020 even when assuming that the growth strategy has the desired effects. (ii) Moreover, further economic and fiscal reforms are required from 2030 to 2070 because of accelerated population aging. (iii) However, population policy and an extended retirement age contribute to significant improvements in Japan’s fiscal condition after 2070. (iv) In contrast, the promotion of productivity and the labor force participation rate have a lesser impact on fiscal reconstruction.

Keywords: Fiscal consolidation; Growth strategy; Demographic change (search for similar items in EconPapers)
JEL-codes: E37 E61 E62 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:37:y:2015:i:c:p:82-99

DOI: 10.1016/j.jjie.2015.05.004

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