Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92756
Authors: 
Kohara, Miki
Horioka, Charles Yuji
Year of Publication: 
2006
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 663
Abstract: 
We use micro data on young married households from the Japanese Panel Survey of Consumers in order to analyze the importance of borrowing constraints in Japan. We find (1) that 8 to 15 percent of young married Japanese households are borrowing-constrained, (2) that household assets and the husband's educational attainment are the most important determinants of whether or not a household is borrowing-constrained, and (3) that the Euler equation implication is rejected for both the full sample and for the subsample of unconstrained households. These results suggest that the life cycle/permanent income hypothesis does not apply in Japan and that the presence of borrowing constraints is not the main reason why it does not apply.
Subjects: 
Borrowing constraints
Liquidity constraints
Consumption
Life Cycle/Permanent Income Hypothesis
Permanent Income Hypothesis
Euler Equation
Households
Japan
JEL: 
D1
D9
E2
G1
Document Type: 
Working Paper

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