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


  • Daisuke Ishikawa

    (Ministry of Finance, Japan)

  • Yoshiro Tsutsui

    () (Osaka University)


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.

Suggested Citation

  • Daisuke Ishikawa & Yoshiro Tsutsui, 2008. "Reluctance to Lend and Its Spatial Differences in Japan fs Lost Decade: What Can We Learn from It?," Discussion Papers in Economics and Business 08-33-Rev, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Jan 2011.
  • Handle: RePEc:osk:wpaper:0833r

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    credit crunch; prefectural panel data; shift of functions; Japanese loan market;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies


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