The Japanese economy seized an opportunity to change market participants’ expectations through “Abenomics,” which included a bold monetary easing program that induced a substantial rise in stock prices and a considerable depreciation of the yen. However, the recovery of the real side of the economy is not yet complete, and it is still uncertain whether the Japanese economy can ultimately overcome secular stagnation. This chapter reviews and summarizes the main findings of the previous chapters to provide a unified view of the structural causes of and problems behind the lost two decades of the Japanese economy. In light of the supposition that the entrenchment of reputable firms under stronger market pressure in the 2000s caused the sluggishness in factor reallocation and innovation after the recovery of zombie firms, several avenues to revitalize the corporate sector in Japan are discussed.
Lost two decades of the Japanese economy Recovery of zombie firms Entrenchment of reputable firms “Abenomics” Multiple equilibria
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