Despite recent successes in improving economic trends for Japan, there is much work to be done to improve its vitality. RIETI Vice President Morikawa looks at Japan's policy of regulatory reform in terms of effectiveness, based on wide-ranging surveys of industries and business communities in an attempt to provide some guidance in terms of future directions that policy should take to lift Japan out of its long-standing economic rut, with symptoms of low productivity and wage stagnation leading to declining local economies and lagging international competitiveness. The impacts of social regulations, local and national government licensing and permit programs, international political and economic unrest need to be addressed with real-world solutions backed by profound comprehension of policy effects, which only serious analysis will provide.
Evidence-based Regulatory Reform
This month's featured article
Evidence-based Regulatory Reform
MORIKAWA MasayukiVice President, RIETI
The year 2020 will be the eighth year since Abenomics started. Although quantitative policy impacts are difficult to identify, many economic indicators have improved over these few years. Corporate operating profits have increased by 70% from FY2012 to FY2018, and non-manufacturing profit margins have hit a record high. The unemployment rate has declined to the low 2% range, a level before the "lost two decades." Against the background of labor shortages, labor participation rates of women and elderly people have risen.
Life satisfaction score has improved in Japan, hitting a post-war record in 2018. This is probably because of the improved employment environment and low rates of price increases. The 2% inflation target set by the Japanese government and the Bank of Japan has not yet been met, but low inflation rates positively affect people's life satisfaction. The life satisfaction score has especially increased among young males, although this may be partly attributable to their lowered aspirations. However, high life satisfaction itself is good news.
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