Is Abenomics Working ?

Recently Paul Krugman wrote a typically diplomatic post entitles “What to do when You’re Wrong” . I thought of that while advising Alessio Marchetti’s undergraduate thesis. He argues at some length that the Abe/Kuroda efforts stimulate an economy at the lower bound with monetary policy have been successful.

Of course I had vaguely noticed this. The problem is that he finds strong evidence that the effects were not achieved only through the exchange rate — there is a very significant partial correlateion between the break even inflation rate and the number of building permits issued.

worst of all he interprets the results as showing that words count more than actions — the explanation of the huge effect in Japan and the tiny effects of announcements in the USA (before the tapering fiasco) seems to him (and I admit me) to show that massive actions combined with the reassurance that they are moderate and influenced by concern about over stimulating the economy just don’t work.

I’d like to claim that I didn’t make predictions about Abenomics, but I foolishly googled myself an found this

Gloating in the comments thread is allowed, but I don’t have the guts to read the comments.