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spencer's avatar

nice piece, very informative. for the uninformed, what is the motivation behind fiscal/monetary policies that encourage zombie lending? is it as "simple" as cultural? or was it meant to allow soft off-ramps to more productive industries and it was overdone?

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Maxwell Tabarrok's avatar

I would say the cultural aspect is sustaining the practice, but the original motivation is to avoid the short term cost of a business going bankrupt and having to shut down.

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Noah's avatar

Fascinating! Thank you!

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gregvp's avatar

In most advanced countries, fertility decline seems to be mainly a problem of marriage, or pair bonding more generally. This is particularly so outside of the Nordic and Anglo countries. In Japan, I believe, births outside of marriage are vanishingly rare.

So, fertility declines as the proportion of never-marrying women rises. Japan might do well to figure out why it is rising and what to do about it.

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Abi Olvera's avatar

Fantastic post, congrats on the 100th post!

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Francis Bond's avatar

Could it be that the zombie lending is one of the factors that leads to the low crime? If people have jobs, even non-productive ones, then they are better able to function in society. Japan's policies may be optimizing for social harmony rather then growth, ...

For the fertility problem, better child care is the number one issue of Japanese women (or was the last time I checked), which the government could address, but conservative politicians who believe a woman's place is in the home refuse to support it, ...

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