Re:Japan's Abe is the world's best leader right now?
by Pitarou on Monday June 16, 2014 @12:14AM
(#7897383)
If I wanted to be upbeat about Abenomics, I think I'd say pretty much the same things you are. I think I just have a gloomier outlook than you.
So I hope you're right, but I'm still keeping my savings overseas in case you're not. Because there's one thing I've learnt from other financial catastrophes: by the time ordinary people like me learn that the shit has hit the fan, it's already too late to respond.
But often economic management is delaying a crisis until another problem makes it go away.
If Abe can get the economy growing again it makes it more likely other changes will occur - like the female participation rate increasing.
The consequences of that are unpredictable. One possible scenario is that it could partially reverse the trend of a shrinking workforce.
Economic growth also makes inflation unnecessary to repay debt (since tax receipts increases with growth giving the government an alternate path to repaying debt).
Also worth noting is that some inflation (non-hyperinflation, but higher than comparable nations) would help devalue the Yen, which would make Japanese exports more attractive again.
Anyway, I guess my whole message is that focusing too much on too long-term consequences is often unhelpful in economics. The system is too chaotic to predict that far, and usually tends towards equilibrium.