Abenomics Seems to Be Working: Ritholtz Chart

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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We are more than 18 months into Abenomics -- Japanese Prime Minister Shinzo Abe's set of economic policies -- and, so far, it seems to be achieving some level of success. Deflation is being replaced by inflation; profits and investments are both increasing for Japanese companies; and the Nikkei 225 is up considerably.

Credit is due to Japan's monetary stimulus for ending deflation and its fiscal stimulus for helping to start the country's economic recovery.

The third arrow of Abenomics will be structural reforms.

The graphic below shows the five goals of Abe's third arrow:

There has been no word about how the policies of Abenomics plan to deal with Japan's demographic concerns.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Barry L Ritholtz at britholtz3@bloomberg.net