Richard Katz argues that the best way to fix Abenomics is to actually implement it. The original “three arrows” concept (monetary stimulus, fiscal stimulus and structural reform) is fine. However, none of the three arrows work without the other two, and, so far, only one has even been tried, i.e., monetary stimulus. Prime Minister Shinzo Abe’s third arrow has been lots of nice-sounding goals with no strategies or actions to fulfill them. Fiscal policy has had one foot on the gas pedal and another on the brake. As a result, real GDP is virtually no higher than it was eight years ago before the global financial crisis. Real wages have fallen 9% since 2007, with half of that fall occurring on Abe. Real exports are flat despite a 30% depreciation of the yen, indicating a fundamental problem of competitiveness on the part of Japanese firms.

Richard Katz is Editor-in-Chief of The Oriental Economist Report (TOE). He is also a special correspondent for the Weekly Toyo Keizai, a leading Japanese weekly business magazine published by Toyo Keizai.