While critics of "Abenomics" begrudgingly agree Prime Minister Shinzo Abe's policy package has been a success so far, they are equally quick to highlight its looming headwinds.
They concede that the first two "arrows" of Abe's economic program, monetary easing and fiscal stimulus, have achieved their goals, but argue that the third arrow, structural reform, will never materialize. The more pessimistic economic commentators even expect the upcoming consumption tax hike to mark the beginning of the end of the Abenomics success story.
But like so often in politics and economics, the reality is a bit more complicated than that. Most people realize that the future of Japan's economy rests on the implementation of structural reform. This in itself is a fact. However, the economy's future does not depend exclusively on structural reform. Why is this?