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TOKYOAfter two decades of economic stagnation, once-mighty Japan is beginning to revive

under policies that some experts say could offer lessons to the still-struggling economies of

the United States and Europe.

While the Eurozone tries to break out of recession and the U.S. economic recovery remains

anemic, Japan has begun to grow at an encouraging rate.

The shock-therapy policies of Prime Minister Shinzo Abe have helped Japan's economy expandfor three straight quarters at a pace faster than that of the United States.

Its stock market has surged more than 50% in less than a year. Leading automakers and evenlong-struggling electronics firms such as Sony Corp., beaten down by Apple Inc. and Samsung

Electronics Co., are reporting a jump in profits.

The combination of government and financial measures popularly know as Abenomics may

finally be snapping Japan out of the doldrums, and that is drawing increasing attention fromeconomists in the West.

Japan's struggles with deflation and a rapidly aging society are in many ways unique, but some

of the problems that have long trapped Japan, including sagging incomes and structuralweaknesses, are similar to those dogging the U.S. and Europe.

"It may have quite a lot to teach us," Joseph Stiglitz, the Nobel laureate economist, wroterecently. "If Abenomics is even half as successful as its advocates hope, it will have still more to

teach us."

Japan's central bank has begun to pump more cash into its economy, lifting the nation's exportsby reducing the price of Japanese products in the global marketplace.

In addition to adopting strong monetary policy, Abe has boosted government spending to put

more money into the pockets of Japan's citizens. The U.S. and Europe, by contrast, have largely

emphasized cutbacks, an approach economic studies suggest have slowed job creation andoverall growth.

And Abe is preparing a series of structural reforms, including changes in taxes and labor rules, inthe hopes of sustaining the nation's growth long term.

"This time, Japan's economic recovery is different from the past," Akira Amari, Abe's chiefeconomic minister, said in an interview. "We are matching fiscal, monetary and growth policies."

Abe will be detailing his growth strategy in October. So far, many Japanese are skeptical,unconvinced that their country is really making a comeback.

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Some are wary of Abe, as he served briefly as prime minister before with little success and is

widely known to be more interested in pursuing his non-economic, nationalistic goals, including

strengthening Japan's military.

"I don't feel anything from Abenomics," said Sadao Yamaguchi, whose family shoe business in

Tokyo has been catering to Japanese salarymen for nearly a century.

Yamaguchi, 79, considers his shoe store a bellwether of the Japanese economy.

His business flourished from the years after World War II until the early 1990s, when the

country's bubble economy burst and fell into a spiral of falling prices and wages. Since then, heand his son and daughter-in-law have seen their livelihoods shrink as their middle-class

customers hoarded cash and sought cheaper brands.

Though Abenomics has yet to touch ordinary Japanese families such as the Yamaguchis,economists expect the nation to break out of deflation. In July consumer prices rose for a second

straight month.

A stronger Japanese economy, the world's third largest, would help boost global demand. And if

Abe can make good on his growth goals, Japan would probably be held up as a model for

making tough structural reforms that many countries, including the U.S., have tended to avoid asthey have relied instead mostly on monetary stimulus to support growth.

For the U.S., important structural reforms would include policies to bolster infrastructure

investment and the skills of American workers, said David Dollar, a senior fellow at the

Brookings Institution.

"As the rest of the world looks at the United States' recovery, it's worried about too-rapidwithdrawal of fiscal and monetary stimulus," he said during a recent briefing on the upcoming

G-20 summit. "And it would like to see the United States move ahead on some of these structuralreforms that would make the U.S. economy more competitive and create a solid foundation for

U.S. growth going forward."

As in the U.S., many of the key structural changes that Abe is considering are fraught with

political and bureaucratic obstacles, but Abe has a real chance to push his policies through

Japan's bureaucracy and long-paralyzed legislature. His party won a convincing election thissummer, reclaiming control of both chambers of Parliament.

Abe's ministers are considering a cut in corporate taxes for investments and research. At thesame time, to bring Japan's fiscal budget under control, Abe is looking at raising the national

consumption tax to 8% from 5%a risky move that could snuff out the momentum in

consumer spending.