The purpose of this paper is to investigate the fiscal sustainability of Japan by applying a dynamic stochastic general equilibrium model to the Japanese economy. By introducing intermediation costs into the model, we succeed in explaining the observed relationship between the interest and GDP...

This paper presents an overview of the extant literature on the real impacts of financial constraints, with a particular focus on those originating from adverse shocks on bank lending. While numerous studies have been conducted to establish the causal linkage between negative fund supply shocks...

This paper investigates fiscal sustainability of Japan by providing a dynamic stochastic general equilibrium (DSGE) model that features the low interest rate of the government bond relative to the economic growth rate to mimic the actual data. We evaluate fiscal sustainability by investigating...

Using a dataset of Japanese firms from the latter half of the 1990s to 2010, we conduct an analysis of the determinants of the funding through initial public offerings (IPOs) by non-listed companies, and the funding through seasoned equity offerings (SEOs) and bond issues by listed companies, as...

Is the timing of a firm's large-scale investment (investment spike) affected by external finance constraints? We use firm-level quarterly data including those on unlisted firms, and estimate the investment hazard rate, i.e., the probability of undertaking a new investment spike today as a...

In this paper, we investigate whether a natural selection mechanism works for firm exit. By using data of firms after a devastating earthquake, the Greeat Tohoku Earthquake, we examine the impact of firm efficiency on firm exit both inside and outside the earthquake-affected areas. We find...

We propose a framework to examine banks’ asset securitization program. It provides a comprehensive view that explains various separate findings and claims in the literature. We derive optimal timing and quantity of banks’ asset securitization by explicitly incorporating stochastic asset...

This paper investigates the effect of banks’ lending capacity on firms’ capital investment. To overcome the difficulties in identifying purely exogenous shocks to firms’ bank financing, we utilize the natural experiment provided by the Great Hanshin-Awaji (Kobe) Earthquake in 1995. Using a...