TY  - JOUR
AU  - Motonishi,Taizo
AU  - Yoshikawa,Hirshi
TI  - Causes of the Long Stagnation of Japan During the 1990s:  Financial or Real?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7351
PY  - 1999
Y2  - September 1999
UR  - http://www.nber.org/papers/w7351
L1  - http://www.nber.org/papers/w7351.pdf
N1  - Author contact info:
Taizo Motonishi
Kansai University
Faculty of Economics
Osaka, Japan
E-Mail: tmoto@ipcku.kansai-u.ac.jp
AB  - Corporate investment is the most important factor to explain the long stagnation of Japan during the 1990's.  Using the Bank of Japan diffusion indices of  real profitability' and  banks' willingness to lend', we estimate investment functions for four groups of firms: large/small and manufacturing/non-manufacturing. Our results suggest that for large firms, financing constraints are not significant whereas the converse is true for small firms. A fall of investment during 1992-94 is largely explained by real factors.  However, the credit crunch occurred beginning 1997 and it lowered the growth rate of GDP by 1.6%.
ER  -