1997 Fiscal Year Final Research Report Summary
Financial Restraint and Economic Development in Japan
| Project/Area Number |
08630085
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | HITOTSUBASHI UNIVERSITY |
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Principal Investigator |
YU Yibo DEPARTMENT OF COMMERCE ASSISTANT PROFESSOR, 商学部, 講師 (80272764)
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| Project Period (FY) |
1996 – 1997
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| Keywords | Financial Restraint / Deposit Rate Controls / Rents Creation / Window Guidance / Discount Rate |
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| Research Abstract |
This paper is to study the effect and the transmission mechanism of financial restraint in Japan. First, we show that deposit rate controls worked during the High-Growth-Era while the regulation of lending rate didn't work. We demonstrate that the lowered deposit interest contributed to post-war Japan's economy growth mainly through two routes. One is the direct reduction of the funding cost of Japan's enterprises. The other is the improvement of safety and efficiency of financial system through the creation of rents in the financial sector. Further we evidence that the loan of city banks is controlled by window guidance during the High-Growth-Era while the loan of regional banks by the adjusting of the discount rate of Bank of Japan.
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