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Vol. 64, No. 1, pp. 13-29 (2013)

“Farmers' Debt in 1930s Japan”
Yutaka Arimoto (Institute of Economic Research, Hitotsubashi University), Takeshi Fujie (Research Center for Sustainability and Environment, Shiga University), Tetsuji Senda (Academic Center for Computing and Media Studies, Kyoto University)

This paper presents three stylized facts about farmer's debt in 1930s Japan, using microdata of an extensive survey conducted in 1934. First, the purpose of debt was different among income and asset classes. Namely, high-income farmers tend to borrow for investment and production purposes, while low-income farmers used debt mainly for consumption. Second, difference in interest rates and repayment periods were mainly based on the difference in lenders rather than borrowers' household or debt characteristics. Third, household with low income or assets had lower probability of borrowing especially from banks, suggesting the presence of credit rationing.