ECONOMIC EFFECTS OF DEVELOPMENT FINANCE
1974 Volume 25 Issue 3 Pages 32-43
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1974 Volume 25 Issue 3 Pages 32-43
This paper attempts to present a general econometric model, and to thereby measure the long-term economic effects of the development finance with the lowlevel interest rate to accelarate the economic growth of backward areas and to control the outflow of population. The model was constructed based upon the pooling data of Hokkaido-Tohoku areas and consists of twenty-five equations. The simulations revealed that one unit finance would create three units income accompanied at most one tenth spill-over effect, and 610, 000 yens of finance would decrease the population outflow by one person. It was verified that the past governmental development finance was highly effective, and satisfied the investment criteria set by Borts-Sakashita. The social outflow of population of those areas would be larger by seventeen percent if the governmental finance stopped to funtion in the past.
