Japan’s Neoliberal Reform and Quantitative Easing

Abstract

Purpose: This article examines how the Japanese government’s neoliberal reforms have changed before and after the 2008 U.S.-originated financial crisis. It compares the results of the Koizmi’s neoliberal reform and quantitative easing of Abenomics. Research design, data, and methodology: It compares the achievements of the two Japanese government’s neoliberal reforms in the 21st century, especially the Koizumi’s neoliberal reform before the 2008 financial crisis and Abenomics, which promoted a stronger market-friendly policy through quantitative easing after the 2008 financial crisis. To prove the results, I used data and informations from published books, articles, and internet. Results: The analysis shows that there is no significant difference between Koizumi’s neoliberal policies through balanced budgets and Abe’s neoliberal policies that have been quantitatively perfected. Japan’s economic growth was more influenced by external economic conditions such as the U.S.-led financial crisis or China’s economic growth than by the reforms of Koizumi and Abe. The more important factors that sustain Japan’s economic recession are the internal factors such as depopulation due to the low production & aging and the ever-increasing national debt. Implications: The more important factor to escape from the long-standing economic recession in Japan is not the neoliberal economic policies but to stopping the tendency to depopulation. Also another important factor for the recovery of the Japanese economy is to lowering the huge national debt. Population losses and a large national debt are two main factors of Japan’s economic woes.