Who killed the Japanese money multiplier? A micro-data analysis of banks
AbstractThis paper investigates causes of the recent sharp decline in the money multiplier in Japan from the bank side. Two candidates for the cause are examined: the first is the worsening of the banksâ€™ financial soundness, and the second is the zero interest rate policy. Using panel data of banksâ€™ balance sheets, it is shown that both can contribute to a decline in the responsiveness of loans to a base money expansion. Quantitatively, the low interest rate is the more important among the two
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society 2004 Far Eastern Meetings with number 632.
Date of creation: 11 Aug 2004
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money multiplier; panel data; banking; bad loans; zero interest rate;
Find related papers by JEL classification:
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-30 (All new papers)
- NEP-CBA-2004-10-30 (Central Banking)
- NEP-MON-2004-10-30 (Monetary Economics)
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