The news that Japan’s real GDP dropped sharply in the last quarter of 2019 and the economy appears to be entering a new ‘technical’ recession (two consecutive quarterly contractions) in 2020 has produced a reaction from mainstream economics.

The worry is that ‘Abenomics’ – the economic policy approach of the current Liberal Democrat prime minister, Shinzo Abe – is failing.  Abenomics was introduced in 2012 after a fanfare of support and encouragement by such economic luminaries as Ben Bernanke, former head of the US Federal Reserve and now President of the American Economics Association;, and Paul Krugman, Nobel prize winner and leading Keynesian guru.  Both economists were invited by Abe to address the Japanese cabinet on the right policies to get Japan out of the stagnation that the economy had experienced through the 1990s and then after the impact of the Great Recession of 2008-9.

Bernanke, being a leading monetarist…