Economic Analysis Series No.177
THE ECONOMIC ANALYSIS

December, 2005
(Articles)
"Did Money or Loans Play a More Important Role in the Showa Depression?"
Yutaka Harada
"Estimates of Quality-adjusted Cost Function in the Okinawa's Child Care Industry: Evidence from Micro-level Data"
Satoshi Shimizutani
Haruko Noguchi
(Special section)
"Decline in Banking System Functioning, Deflation Expectations, and Money Multiplier: Why Did the Japanese Economy Stagnate?"
Yutaka Harada
"Declines in the Credit Multiplier Due to Instability in the Financial System"
Keiichiro Kobayashi
Comment
"Some Difficulties of "Financial System Hypothesis""
Yasuyuki Iida
Rejoinder
Keiichiro Kobayashi
"Declines in the Money Multiplier Due to Continuous Deflation Expectation"
Yasuyuki Iida
Comment
"Can Expectations be a Root Cause of Recessions?"
Keiichiro Kobayashi
Rejoinder
Yasuyuki Iida
(Research note)
"The Advancement of IT and Changes of Input Structure of the Financial Industries: An Analysis based on the Japanese Input-Output Table"
Hayao Washizaki
Mariko Fujii
(Study)
"Family Life and Family Policy in France and Germany: Implications for Japan"
Tomoko Hayashi
Rieko Tamefuji

The full text is written in Japanese.

(Abstract)

(Articles)

"Did Money or Loans Play a More Important Role in the Showa Depression?"

Much research has concluded that Japan's deteriorated banking sector had an adverse affect on the Great Depression. In Japan, however, only few empirical studies have been made on this important subject.
    This paper estimates the effects of money and loans on production by using a vector auto regression model, among other analytical tools. The model is estimated by using monthly data from 1922-36. The estimation results show that price and money significantly affect production (in some cases money does not significantly affect production), but that the effect of loans is strictly limited.

"Estimates of Quality-adjusted Cost Function in the Okinawa's Child Care Industry: Evidence from Micro-level Data"

Okinawa suffers from a severe shortage of child care services, even among non-urban areas in Japan. This study is the first to take advantage of some unusually rich micro-level data to address to quantitative assessment of quality of child care and estimates of quality-adjusted costs function by types of management in Okinawa.

(Special section)
"Declines in the Credit Multiplier Due to Instability in the Financial System"

It is shown theoretically and empirically that a disruption of bank health may cause a decline in the credit multiplier. Our VAR analysis shows that a negative shock to the bank stock prices causes a contraction in the money supply.

"Declines in the Money Multiplier Due to Continuous Deflation Expectation"

This thesis verifies a typical hypothesis concerning the money multiplier. We obtained the following conclusions from these analyses, i) The money multiplier declines in 90's was due to the cash ratio rise of the nonfinancial sector, and the excess reserve possession of the bank caused decreasing in the multiplier in 2000's, ii) The expected inflation rate intentionally explains the money multiplier, iii) There are many contradicted points in "the bad loan hypothesis" of the money multiplier.

(Research note)
"The Advancement of IT and Changes of Input Structure of the Financial Industries: An Analysis based on the Japanese Input-Output Table"

We investigated IT inputs by summing up the IT-related items from the input-output tables and found that IT inputs in financial sectors have been larger than those of other industries. However, the growth rate of IT inputs in financial sectors in the late 1990s remained relatively low. Observations based on the data to year 2000 provided no clear evidence that the Japanese financial sectors were opening up to new business strategies by actively deploying advanced IT technology.

(Study)
"Family Life and Family Policy in France and Germany: Implications for Japan"

By conducting a survey of French and German families and analyzing the data, this paper identifies factors that make the fertility rate high in France and low in Germany. In France, sufficient and various family allowance, fully prepared child-care service, and shorter working hours are the factors. Thus, ways to come back to work after having a child vary according to individual circumstances. Although family allowance and child benefits are sufficient in Germany, lack of child-care service and half-day school make the opportunity cost of having children high.

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