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http://mobile.nytimes.com/2016/08/03/business/international/japan-economy-stimulus-yen.html
TOKYO — In the three and a half years since he won the Japanese prime minister’s office on a pledge to rekindle economic growth, Shinzo Abe has tried many tactics to coax the economy into expanding.
He persuaded the central bank to flood the country with cheap money. He sanctioned a sharp fall in the value of the yen, a boon for big exporters like Toyota and Panasonic. And he increased government spending, pouring cash into areas as varied as day care and defense.
The result has been well short of the renaissance Mr. Abe promised. Now his government is embarking on what may be its biggest spending program yet.
On Tuesday, the government detailed a package of financial measures that it said was worth 28 trillion yen, or $274 billion, equal to more than 5 percent of Japan’s gross domestic product. Economists immediately began debating its impact, with many arguing that the jolt it would give to growth would be much smaller than the headline number suggests.
Mr. Abe is trying to accelerate an economy that, since he took office at the end of 2012, has created millions of new jobs but little wage growth. Economic output has flip-flopped between expansion and contraction, and deflation — a corrosive decline in consumer prices — remains stubbornly entrenched.
“We’ve put together a bold stimulus proposal that is an investment in the future,” Mr. Abe said on Tuesday. It will allocate money to social programs and infrastructure, including the construction of a high-speed train that will use magnetic levitation, or maglev, technology to float above its tracks.
The stimulus program represents a redoubling of Mr. Abe’s effort to promote growth and crush deflation, which has dogged Japan since the 1990s.
Though he has approved spending increases before, he has relied heavily on the money being pumped into the economy by the central bank, the Bank of Japan. This year, the bank took the extreme measure of reducing its benchmark interest rate below zero.
TOKYO — In the three and a half years since he won the Japanese prime minister’s office on a pledge to rekindle economic growth, Shinzo Abe has tried many tactics to coax the economy into expanding.
He persuaded the central bank to flood the country with cheap money. He sanctioned a sharp fall in the value of the yen, a boon for big exporters like Toyota and Panasonic. And he increased government spending, pouring cash into areas as varied as day care and defense.
The result has been well short of the renaissance Mr. Abe promised. Now his government is embarking on what may be its biggest spending program yet.
On Tuesday, the government detailed a package of financial measures that it said was worth 28 trillion yen, or $274 billion, equal to more than 5 percent of Japan’s gross domestic product. Economists immediately began debating its impact, with many arguing that the jolt it would give to growth would be much smaller than the headline number suggests.
Mr. Abe is trying to accelerate an economy that, since he took office at the end of 2012, has created millions of new jobs but little wage growth. Economic output has flip-flopped between expansion and contraction, and deflation — a corrosive decline in consumer prices — remains stubbornly entrenched.
“We’ve put together a bold stimulus proposal that is an investment in the future,” Mr. Abe said on Tuesday. It will allocate money to social programs and infrastructure, including the construction of a high-speed train that will use magnetic levitation, or maglev, technology to float above its tracks.
The stimulus program represents a redoubling of Mr. Abe’s effort to promote growth and crush deflation, which has dogged Japan since the 1990s.
Though he has approved spending increases before, he has relied heavily on the money being pumped into the economy by the central bank, the Bank of Japan. This year, the bank took the extreme measure of reducing its benchmark interest rate below zero.