The Japanese economy in fiscal 2016 showed steady development supported by a weak currency, bold monetary easing, low crude oil prices, and recovery of the world economy. Firms earned record profits and equipment investment is currently on the rise. Wages are also gradually increasing, supporting domestic consumption.
However, there are also economic challenges. Compared with the growth of corporate earnings, the increase in wages is not large enough to provide households with the benefits of the improving economy, and domestic demand is still not strong enough to drive further economic recovery.
In light of these circumstances, the government is promoting working style reform. The reform is intended to promote work-life balance through reduced working hours, and to revitalize domestic demand by resolving the disparities between regular and non-regular workers and improving productivity.
In April 2016, RIETI started its Fourth Medium-term Plan which focuses on "Cultivating Japan's strength in the world economy," "Making Japan into an innovative nation," and "Overcoming population decline." In fiscal 2016, we published a large number of research papers in a wide range of policy areas including economy and finance, social security, human capital, and international trade, while hosting many symposiums and seminars related to topics such as artificial intelligence (AI), Brexit, and working style reform.
We also focused on our collaboration with overseas research institutes and the development of databases for areas relevant to our research. We continued to update and expand the databases concerning productivity such as the Japan Industrial Productivity Database (JIP Database) and the China Industrial Productivity Database (CIP Database), and exchange rates such as the industry-specific nominal and real effective exchange rates in 25 countries.
RIETI, as a policy think tank, will continue to conduct theoretical and empirical research that contributes to economic and industrial policymaking in order to make policy recommendations based on evidence. At the same time, we will deliver the research findings in a timely manner through symposiums and seminars.