Abenomics

Abenomics (アベノミクス, Abenomikusu^?) refers to the economic policies advocated by Shinzō Abe since the December 2012 general election, which elected Abe to his second term as Prime Minister of Japan. Abenomics is based upon "three arrows" of monetary easing, fiscal stimulus and structural reforms.The Economist characterized the program as a "mix of reflation, government spending and a growth strategy designed to jolt the economy out of suspended animation that has gripped it for more than two decades."

The term "Abenomics" is a portmanteau of Abe and economics, and follows previous political neologisms for economic policies linked to specific leaders, such as Reaganomics, Clintonomics and Rogernomics.

The Japanese government raised consumption tax rates from 3% to 5% in 1997, which worsened the recession and deflated the economy. The government raised the consumption tax in 1997 for the purpose of balancing its budget, and then the government revenue decreased by 4.5 trillion yen because consumption stumbled. The country recorded a GDP growth rate of 3 percent in 1996, but after the tax hike the economy sank into recession. The nominal GDP growth rate was below zero for most of the 5 years after the tax hike. Japan's averaged annual wages grew during 1992-1997, but the wages started to decrease after the consumption tax hike came into effect in 1997. After 1997, the wages decreased faster than the nominal GDP.

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