Influence of Maximum Interest-Rate Regulation on Regional Economic Effects : Cases in Hokkaido

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  • 上限金利規制が与えた地域経済への影響とその後 : 北海道経済のケース

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This paper analyzes the following three cases concerning the influence of national policies on regional economic conditions with a focus on economic and employment effects in Hokkaido's economy. Specifically, it deals with the following: (1) The economic effects of maximum interest-rate regulation under the revised Money-lending Control Act as a system design change (2) The economic effects of regulations on loan amounts under the revised Money-lending Control Acts. (3) The economic effects of cash-benefit distribution as a public policy requiring the injection of taxpayers' money The results can be summarized as follows: (1) Maximum interest-rate regulation produced negative effects, including nominal GDP growth rate shrinkage of 0.24% annually between 2006 and 2008 and an increase in the number of unemployed people to more than 28,500. (2) Regulations on loan amounts produced negative effects, including nominal GDP growth rate shrinkage of 0.25% and an increase in the number of unemployed people to more than 10,100 under the not pass the credit inquiry 50%. (3) Distribution of cash benefits resulted in economic expansion of up to 0.30% and the creation of jobs for 7,695 people under the propensity to consume 63%. However, this was a once-only measure to boost final consumption, and its cost-effectiveness must be examined thoroughly.[table]

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