How Inclusive Is Abenomics?

Chie Aoyagi, Giovanni Ganelli and Kentaro Murayama

No 2015/054, IMF Working Papers from International Monetary Fund

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.

Keywords: WP; income growth; BoJ inflation target; inflation rate; market income; Japan; Inclusive growth; Economic growth; labor market duality; descriptive analysis; income equality; Personal income; Income inequality; Income distribution; Global (search for similar items in EconPapers)
Pages: 35
Date: 2015-03-13
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Citations: View citations in EconPapers (6)

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Journal Article: How Inclusive is Abenomics? (2016)
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