Abenomics: Towards Brighter Future or More of the Same?

This thesis investigates the impact of Abenomics policies, named after the new Japanese Prime Minister Shinzo Abe, on the economy. His so-called "three arrows" agenda includes fiscal expansion, quantitative and qualitative monetary easing, and regulatory reforms. This work focuses on the assessment of the fulfillment of set goals and compares Abenomics to previous policies. Abe's cabinet succeeded in raising inflation and depreciating yen. The debt growth has almost halted and the GDP has mildly recovered. However, the economy is still far from stable. This thesis also explores further issues encountered by the Japanese economy such as the shut-down of nuclear power plants and effects of the zero lower bound constraint. This work introduces a synthetic counterfactual to assess the real results of Abenomics. This method builds a model of an alternate Japan, in which Abe had not assumed the office. The results suggest that the impact of Abenomics on the GDP per capita is slightly positive or negligible.