Ecoman

Ecoman Written Report for 2nd Set Reporting

Article: "I am convinced that our road is the only way" Financial Times by David Pilling and Jonathan Soble. October 8, 2013

0 Give the Salient Features Of the Article

Abeconomics

Based on the definition from the Financial Times Lexicon, Abenomics or Abeconomics is the name given to a suite of measures introduced by Japanese Prime Minister Shinzo Abe after his December 2012 re-election to the post he last held in 2007. His aim was to revive the sluggish economy with "three arrows": a massive fiscal stimulus, more aggressive monetary easing from the Bank of Japan, and structural reforms to boost Japan's competitiveness.

Japan's Legendary Economic Problems That PM Shinzo Abe would like to address:

* Stuck in deflation for the best part of 15 years, the economy has shrunk from its 1997 peak in nominal terms

* Even though unemployment rate is low, many young people have been pushed into low-paying "McJobs"

* The population is ageing rapidly and public debt, now at a dizzying 230 per cent of national output in gross terms, has piled ever higher

* Some former corporate titans, including Sony and Panasonic, are a pale shadow of their former selves

PM Abe’s battle cry is "Revive the Animal Spirits that have been sapped by years of deflation". He wanted to invigorate the economy out of deflation through massive monetary stimulus with the aim of reaching 2 percent inflation by March 2015. However, Dr. Noriko Hama, a Japanese economist, the Dean of Doshisha Business School in Kyoto, and a contributor to The Japan Times said that Abenomics will fizzle out... She also calls it "Ahonomics" in Japanese which means "Stupidnomics".

According to the case there is a risk from the potential impact of a consumption tax rise from 5% to 8% starting in April 2014.

There are also inflation policy risks such as the recent rise in Core Consumer Prices - to 0.8 percent in August - is due almost...