For however much I dislike Abe personally, looking beyond the urge that my behavior bias would like to instill in me, his declaration that “Japan is back” could become the reality if Japan sticks to the current economic policies (given that he is in power and does not yield to pressure). I do not like him for denying all the atrocity Japan has inflicted on other countries during WWII and for much longer to China and Korea, but I also would like him to continue to be in power to prove that the economic policies he uses is correct and is the way to go for the other developed countries in chronical recession. I meant to say some good words months ago when he first created a lot of noise on his new economic policy but do not have time, as always. But you should know my stand.
Almost coincidentally, Japan is also the first country to get off the shackles of gold standard and also the first country to recover from the Great Depression era. For any doubters, go and see Figure 5 of Eichengreen (1992). I have been using this graph marked with colors for years. If anything it tells you that we should welcome currency wars (not necessarily the trade wars, but even that may not be unnecessary in today’s world when all the Eastern Asia countries and European core countries are keeping pushing to keep the imbalance alive). Currency wars will provide monetary stimulus around the world and get us out of the Great Recession sooner. Although Reinhart and Rogoff argue that the recovery has to be slow, many times it could be a man made consequence instead of having to be that way. Economics is not morality but many are overcome by the behavior bias of morality and mix it with economics.