IDEAS home Printed from https://ideas.repec.org/a/bla/econpa/v43y2024i1p10-33.html
   My bibliography  Save this article

The Long‐Term Economic Impact of Abenomics: Evidence from the Synthetic Control Method

Author

Listed:
  • Josh Matti

Abstract

This paper examines the long‐term causal impact of Abenomics, a comprehensive policy package aiming to revitalise the Japanese economy. Using the Synthetic Control Method (SCM), the study assesses the effects of Abenomics across a variety of economic indicators. The findings reveal mixed impacts, with no evidence of Abenomics reducing budget deficits or boosting exports, but a positive effect on real GDP per capita paired with a reduction in the unemployment rate. The evidence regarding the effect on labor force participation rates is weaker, with primarily statistically insignificant increases observed. These results offer insights into the effectiveness of comprehensive policy interventions and provide lessons for policymakers globally in the midst of a global economic slowdown.

Suggested Citation

  • Josh Matti, 2024. "The Long‐Term Economic Impact of Abenomics: Evidence from the Synthetic Control Method," Economic Papers, The Economic Society of Australia, vol. 43(1), pages 10-33, March.
    • Handle: RePEc:bla:econpa:v:43:y:2024:i:1:p:10-33
    DOI: 10.1111/1759-3441.12408
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1759-3441.12408
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1759-3441.12408?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Grier, Kevin & Maynard, Norman, 2016. "The economic consequences of Hugo Chavez: A synthetic control analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 125(C), pages 1-21.
    2. Matti, Josh & Zhou, Yang, 2022. "Money is money: The economic impact of BerkShares," Ecological Economics, Elsevier, vol. 192(C).
    3. Stefano Costalli & Luigi Moretti & Costantino Pischedda, 2017. "The economic costs of civil war," Journal of Peace Research, Peace Research Institute Oslo, vol. 54(1), pages 80-98, January.
    4. Kohei Aono & Hiroshi Gunji & Hayato Nakata, 2022. "Did the bank of Japan’s purchases of exchange-traded funds affect stock prices? A synthetic control approach," Applied Economics Letters, Taylor & Francis Journals, vol. 29(20), pages 1859-1863, November.
    5. Florence Bouvet & Roy Bower & Jason C. Jones, 2022. "Currency Devaluation as a Source of Growth in Africa: A Synthetic Control Approach," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 48(3), pages 367-389, June.
    6. Fukuda, Shin-ichi, 2015. "Abenomics: Why was it so successful in changing market expectations?," Journal of the Japanese and International Economies, Elsevier, vol. 37(C), pages 1-20.
    7. Ryan A. Decker & John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2017. "Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown," American Economic Review, American Economic Association, vol. 107(5), pages 322-326, May.
    8. Zhou, Yang, 2018. "Do ideology movements and legal intervention matter: A synthetic control analysis of the Chongqing Model," European Journal of Political Economy, Elsevier, vol. 51(C), pages 44-56.
    9. Stefano Costalli & Luigi Moretti & Costantino Pischedda, 2014. "The Economic Costs of Civil War: Synthetic Counterfactual Evidence and the Effects of Ethnic Fractionalization," HiCN Working Papers 184, Households in Conflict Network.
    10. Roland Hodler, 2019. "The Economic Effects of Genocide: Evidence from Rwanda," Journal of African Economies, Centre for the Study of African Economies, vol. 28(1), pages 1-17.
    11. Christopher Hartwell & Roman Horvath & Eva Horvathova & Olga Popova, 2022. "Natural resources and income inequality in developed countries: synthetic control method evidence," Empirical Economics, Springer, vol. 62(2), pages 297-338, February.
    12. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
    13. Yixiao Jiang & George K. Zestos & Zachary Timmerman, 2020. "A Vector Error Correction Model for Japanese Real Exports," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(3), pages 297-311, September.
    14. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    15. Amos Z. B. Flomo & Elissaios Papyrakis & Natascha Wagner, 2023. "Evaluating the economic effects of the Ebola virus disease in Liberia: A synthetic control approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1478-1504, August.
    16. Miyazawa, Kensuke & Yamada, Junji, 2015. "The growth strategy of Abenomics and fiscal consolidation," Journal of the Japanese and International Economies, Elsevier, vol. 37(C), pages 82-99.
    17. Alberto Abadie, 2021. "Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 391-425, June.
    18. Takatoshi Ito, 2021. "An Assessment of Abenomics: Evolution and Achievements," Asian Economic Policy Review, Japan Center for Economic Research, vol. 16(2), pages 190-219, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mohammad Reza Farzanegan & Mohammad Ali Kadivar, 2023. "The effect of Islamic revolution and war on income inequality in Iran," Empirical Economics, Springer, vol. 65(2), pages 1007-1026, August.
    2. Aleksandar Kešeljević & Rok Spruk, 2024. "Estimating the effects of Syrian civil war," Empirical Economics, Springer, vol. 66(2), pages 671-703, February.
    3. Samuel Verevis & Murat Üngör, 2021. "What has New Zealand gained from The FTA with China?: Two counterfactual analyses†," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(1), pages 20-50, February.
    4. Olaf J de Groot & Carlos Bozzoli & Anousheh Alamir & Tilman Brück, 2022. "The global economic burden of violent conflict," Journal of Peace Research, Peace Research Institute Oslo, vol. 59(2), pages 259-276, March.
    5. Pavlik, Jamie Bologna & Jahan, Israt & Young, Andrew T., 2023. "Do longer constitutions corrupt?," European Journal of Political Economy, Elsevier, vol. 77(C).
    6. Samer Matta & Michael Bleaney & Simon Appleton, 2022. "The economic impact of political instability and mass civil protest," Economics and Politics, Wiley Blackwell, vol. 34(1), pages 253-270, March.
    7. Emiliano Toni & Pablo Paniagua & Patricio 'Ordenes, 2024. "Policy Changes and Growth Slowdown: Assessing the Lost Decade of the Latin American Miracle," Papers 2407.02003, arXiv.org.
    8. Samba Diop & Simplice A. Asongu & Vanessa S. Tchamyou, 2021. "The Macroeconomic Impact of Recent Political Conflicts in Africa: Generalized Synthetic Counterfactual Evidence," Research Africa Network Working Papers 21/060, Research Africa Network (RAN).
    9. Alou Adessé Dama, 2021. "Exploring Tilly’s Theory : Violent Conflicts and Tax Revenue in Sub-Saharan Africa," CERDI Working papers hal-03401539, HAL.
    10. Abidemi Adisa & Michael Farmer & Jamie Bologna Pavlik, 2023. "The effect of the Mahathir regime on the Malaysian economy," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 97-114, January.
    11. David Audretsch & Paul P. Momtaz & Hanna Motuzenko & Silvio Vismara, 2023. "The Economic Costs of the Russia-Ukraine War: A Synthetic Control Study of (Lost) Entrepreneurship," Papers 2303.02773, arXiv.org.
    12. Diego D'iaz & Pablo Paniagua & Cristi'an Larroulet, 2024. "Earthquakes and the wealth of nations: The cases of Chile and New Zealand," Papers 2405.12041, arXiv.org.
    13. David Gilchrist & Thomas Emery & Nuno Garoupa & Rok Spruk, 2023. "Synthetic Control Method: A tool for comparative case studies in economic history," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 409-445, April.
    14. Panel, Sophie & Pietri, Antoine, 2022. "God did not save the kings: Environmental consequences of the 1982 Falklands War," Ecological Economics, Elsevier, vol. 201(C).
    15. Alice Lépissier & Matto Mildenberger, 2021. "Unilateral climate policies can substantially reduce national carbon pollution," Climatic Change, Springer, vol. 166(3), pages 1-21, June.
    16. Joshua C. Hall & Josh Matti & Yang Zhou, 2020. "The economic impact of city–county consolidations: a synthetic control approach," Public Choice, Springer, vol. 184(1), pages 43-77, July.
    17. Daniel D. Bonneau & Joshua C. Hall & Yang Zhou, 2022. "Institutional implant and economic stagnation: a counterfactual study of Somalia," Public Choice, Springer, vol. 190(3), pages 483-503, March.
    18. David B. Audretsch & Paul P. Momtaz & Hanna Motuzenko & Silvio Vismara, 2023. "War and Entrepreneurship: A Synthetic Control Study of the Russia-Ukraine Conflict," CESifo Working Paper Series 10466, CESifo.
    19. Suwanprasert, Wisarut, 2023. "Consequences of Thailand’s 2006 military coup: Evidence from the synthetic control method," European Journal of Political Economy, Elsevier, vol. 80(C).
    20. Bilbao-Goyoaga, Eugenia, 2023. "Perceptions Matter: Quasi-Experimental Evidence on the Effects of Minimum Income on Objective and Subjective Financial Wellbeing in Spain," SocArXiv wv7xt, Center for Open Science.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econpa:v:43:y:2024:i:1:p:10-33. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.