Reluctance to Lend and Its Spatial Differences in Japan fs Lost Decade: What Can We Learn from It?

Daisuke Ishikawa and Yoshiro Tsutsui ()
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Daisuke Ishikawa: Ministry of Finance, Japan

No 08-33-Rev, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper aims to elucidate whether supply side factors played a crucial role in causing the greluctance to lend h in Japan in the 1990s. We estimate loan supply and demand functions using prefectural panel data and calculate their shifts. Our analysis reveals that the demand side played an equal or greater role, even in the context of the historical financial crisis in Japan during the period 1997-2000, and that the reluctance to lend was severer in the urban prefectures. These findings suggest that countermeasures in the banking sector that uniformly influence all regions may not achieve the expected recovery.

Keywords: credit crunch; prefectural panel data; shift of functions; Japanese loan market (search for similar items in EconPapers)
JEL-codes: E51 G21 R51 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2008-09, Revised 2011-01
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:0833r

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