Abenomics and the current economic policy in the euro zone

The death of former Japanese Prime Minister Shinzo Abe has rekindled interest in his economic policy: Abenomics. Abenomics had three "arrows": An expansionary fiscal policy in the short term; An expansionary monetary policy in the short term; Structural reforms (labour supply, taxation, competition, energy, financing of industry, etc.). Structural reforms normally restore potential growth in the long run, allowing for a gradual exit from the expansionary policy mix. The situation in the euro zone is currently similar: fiscal and monetary policies are expansionary, and it is hoped that structural reforms (reshoring, skills, higher employment rates, energy autonomy, etc.) will restore potential growth, ensure public debt sustainability and allow for a monetary policy normalisation. The example of Japan should make us cautious: even today, it is impossible to exit highly expansionary monetary and fiscal policies.