If there's one country that needs creative economic policy solutions, it's Japan. With many observers saying Abenomics has stalled after a year of weak economic performance, plenty of people are asking what's next — or has Japan run out of ideas?
The backdrop doesn't look great. The country is experiencing a decline in population. The national debt is mounting. Wages are falling, consumption is depressed and productivity is still stagnating. China, Japan's biggest trading partner, is slowing.
Abenomics — the raft of policies enacted by Prime Minister Shinzo Abe — has had some good effects. Growth and inflation rose for a couple of years, probably as a result of easy monetary policy, before the China slowdown hit. Unemployment has been virtually eliminated, and women have finally entered the workforce (though they often remain confined to insecure low-level positions). A consumption tax hike, along with zero interest rates, has improved the debt position. And a series of corporate governance reforms promise to make Japan Inc. more profitable.