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If you had two minutes with Prime Minister Shinzo Abe to give him one piece of advise on how to build the foundation of a sustainable prosperity, what would you tell him? You may think, this is impossible, the world is too complex and economics is too confused a discipline to provide simple solutions. Surely, there is no “magic bullet” that ensures sustainable growth.

Well, that’s what I thought, until I started looking at the data. No, it is definitely not the standard macroeconomic policy tool kit that delivers sustained prosperity. Although useful for short-term growth boosts and asset price volatility, neither fiscal policy nor monetary policy has a consistently positive and lasting track-record.

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