Causes of the Long Stagnation of Japan During the 1990s: Financial or Real?

Taizo Motonishi and Hirshi Yoshikawa

No 7351, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Corporate investment is the most important factor to explain the long stagnation of Japan during the 1990's. Using the Bank of Japan diffusion indices of real profitability' and banks' willingness to lend', we estimate investment functions for four groups of firms: large/small and manufacturing/non-manufacturing. Our results suggest that for large firms, financing constraints are not significant whereas the converse is true for small firms. A fall of investment during 1992-94 is largely explained by real factors. However, the credit crunch occurred beginning 1997 and it lowered the growth rate of GDP by 1.6%.

JEL-codes: E22 E30 (search for similar items in EconPapers)
Date: 1999-09
New Economics Papers: this item is included in nep-his and nep-pke
Note: EFG
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Published as Motonishi, Taizo and Hiroshi Yoshikawa. "Causes Of The Long Stagnation Of Japan During The 1990s: Financial Or Real?," Journal of the Japanese and International Economies, 1999, v13(3,Sep), 181-200.

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Journal Article: Causes of the Long Stagnation of Japan during the 1990s: Financial or Real? (1999)
Working Paper: Causes of the Long Stagnation of Japan during the 1990 fs: Financial or Real? (1999)
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