Did the Credit Crunch in Japan Affect Household Welfare? An Augmented Euler Equation Approach Using Type 5 Tobit Model
Abstract
We investigate whether the credit crunch in Japan affected household welfare and the manner in which it did. We augment the theoretical framework of a consumption Euler equation with endogenous credit constraints and estimate it with household panel data for 1993-1999, generating several empirical findings. First, a small portion of the people faced credit constraints in Japan before and after the financial crisis in 1997. Accordingly, our results reject the standard consumption Euler equation. Second, the credit crunch affected household welfare negatively, albeit not seriously, after 1997. Our results corroborate that the credit crunch in Japan was supply-driven.Download Info
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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-498.Length: 43 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:tky:fseres:2007cf498
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- Yasuyuki Sawada & Kazumitsu Nawata & Masako Ii & Jeong-Joon Lee, 2007. "Did the Credit Crunch in Japan Affect Household Welfare? An Augmented Euler Equation Approach Using Type 5 Tobit Model," CARF F-Series CARF-F-099, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
- NEP-ALL-2007-08-08 (All new papers)
- NEP-MAC-2007-08-08 (Macroeconomics)
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Citations
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- Joe Chen & Yun Jeong Choi & Kohta Mori & Yasuyuki Sawada & Saki Sugano, 2012.
"Socio‐Economic Studies On Suicide: A Survey,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 26(2), pages 271-306, 04.
- Joe Chen & Yun Jeong Choi & Kohta Mori & Yasuyuki Sawada & Saki Sugano, 2009. "Socio-Economic Studies on Suicide: A Survey," CIRJE F-Series CIRJE-F-629, CIRJE, Faculty of Economics, University of Tokyo.
- Joe Chen & Yun Jeong Choi & Yasuyuki Sawada, 2008.
"How Is Suicide Different in Japan?,"
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CIRJE-F-557, CIRJE, Faculty of Economics, University of Tokyo.
- Chen, Joe & Choi, Yun Jeong & Sawada, Yasuyuki, 2009. "How is suicide different in Japan?," Japan and the World Economy, Elsevier, vol. 21(2), pages 140-150, March.
- Joe Chen & Yun Jeong Choi & Yasuyuki Sawada, 2007. "How Is Suicide Different in Japan?," CIRJE F-Series CIRJE-F-526, CIRJE, Faculty of Economics, University of Tokyo.
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