Abenomics refers to the economic plan implemented in 2012 by Japanese prime minister Shinzo Abe. Lets wind the clock back to the 1970s and 1980s . Japan was a in a period of rapid economic growth, this was caused by many factors like the automation of Japanese industry and manufacture. Japan also played a dominating role in the video game industry and the electronics industry. Japan’s living standard skyrocketed to the top of the world, this period was called the ‘Economic Miracle’. A strengthening Yen against other foreign currencies that made overseas investments relatively cheap. There was also a growing demand worldwide for Japanese goods.  Things looked extremely promising, and unfortunately, what comes up must come down. Things took a turn for the worst. The bottom fell out on both the real estates and stock markets which led to huge inflation, a sharp fall in the price of goods, a sharp rise in unemployment and a recession that lasted for the next two decades. When Shinzo Abe was re-elected in 2012, he ran on a platform of massive changes to economic policy. Abenomics is based on the three arrows of economic policy: Monetary easing, fiscal stimulus and immense structural reforms. The Economist magazine describes it as a “mix of reflation, government spending and a growth strategy designed to jolt the economy out of suspended animation that has gripped it for more than two decades.” The first arrow is monetary easing, Shinzo Abe is putting pressure on the central bank to print more Yen increasing the amount of currency available in Japan. The plan basically is going to flood Japan with cash in attempt to get money moving through the economy. This has had two effects, it raises the price of goods within Japan, it initially may come across as a bad thing but it is designed to encourage people to stop saving and start spending and investing. Hopefully, this will get money flowing through the Japanese economy. It also has the benefit of making Japanese goods  cheaper for other countries to import, increasing trade for Japan. The second arrow is Robust Fiscal Policy. Abe’s government has been spending lots of money, and that amount showed an increase spending in three areas from 2013 to 2014. First, welfare, Japan has a huge elderly population, and the elderly population is rapidly increasing. Only 64% of the population is of working age, and 20% of people over 60, welfare is expensive. Second, debt repayment. For a developed country, Japan has a whopping amount of debt but it has a quite a low interest rate. Third, public works. With Tokyo being announced as the host of the 2020 olympic games. Abe has found no shortage of public places to invest money. From roads, airports, stadiums and much more. Abe is hoping that this investment will create more job opportunities and get the country ready for the games, as well as improving Japan’s infrastructure. To fund this, Abe’s government has increased consumption tax to 8% in 2014 and is planning to increase it to 10% in 2017. The third and final arrow is Policies for Growth Strategies to Spur Private Investment. In short, this arrow is a collection of a variety of different economic policies that aim to increase Japan’s competitiveness in international and global markets, and to remove economic barriers  for domestic businesses. It consists of things such as diversifying markets and labor workforces by adding more women and elderly people, and to increase international trade. The big question on everyones’s mind is: Is Abenomics working? Well, the answer to that is, similar to almost every other thing in economics, impossible to properly answer. In the end, it all boils down to personal opinion. What we do know for certain is that Abenomics has had immediate effects on the Japanese economy. By February 2013, there was a 22% rise in the topics stock market index. It increased again to 55% in May 2013. By the second quarter in 2013, the Yen had fallen 25% against the dollar. Which raised the price of importing goods into Japan. However, Abe claims that a weaker Japanese Yen would lead to a rise in Japanese exports and invite investment from overseas. The government claims that Abenomics has created more than a million jobs, enabled the highest pay in 15 years and increased share prices by more than 70% since 2012.  However, even though the Yen has fallen continually against the dollar, Japanese exports have not grown as much as predicted. Consumer spending has also fallen and some evidence suggests that Abenomics has widened the gap between the rich and poor. The true effect of Abenomics won't be fully evident for many years. Opinions and thoughts are divided. But all we can do is wait and see. The Japanese economy has been a stable one for many years now, slowly but surely deteriorating. One can only hope for the best for the future.