Munich Personal RePEc Archive

The Impact of Policy Shocks on Financial Structure: Empirical Results from Japan

Moayedi, Vafa and Aminfard, Matin (2011): The Impact of Policy Shocks on Financial Structure: Empirical Results from Japan.

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Abstract

This study examines the relationship between Japan’s financial structure and the country’s fiscal/monetary policy. Vector Error Correction models are utilized to investigate the effect of policy shocks on financial structure development during a sample period of 48 years. Our findings reveal signs of an existing long-run relationship between policy variables and financial structure. Policymakers in Japan may have effectively influenced Japan’s financial structure development via fiscal and monetary actions. This result strengthens the assumption of a volatile financial structure due to policy interference. This study is the first of its kind and is intended to stimulate further research and debate.

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