An oft-repeated joke among economists has it that there are four kinds of economy: developed, developing, Argentina and Japan. The joke needs updating: while Argentina is still mired in its traditional problems, Japan is no longer such an unusual economy.
This is partly thanks to the success of Shinzo Abe, now the longest serving Japanese prime minister, and his signature economic reforms known as Abenomics. Less positively, however, it is because other developed countries have become increasingly like Japan. This makes the experience of Abenomics both a salutary lesson and a warning for the rest of the rich world.
The 2010s should not be remembered as another lost decade for Japan. They represented a turning point for the world’s third-largest economy. The rate of nominal growth, which reflects changes in prices as well as changes in the size of the economy, has been higher since Mr Abe began his reforms. The ratio of government debt relative to national income has stabilised for the first time in decades.