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Stabilize the peasant economy: Governance of foreclosure by the shogunate

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  • Mandai, Yu
  • Nakabayashi, Masaki

Abstract

Regulation of foreclosure in a financial crisis has been a centuries-long conundrum to authorities. Japan in the fifteenth and sixteenth centuries had free financial, land and coercive labor markets. It raised the growth but resulted in recurrent financial crises. Therefore, the Edo shogunate, 1600–1868, banned coercive labor, protected peasants’ property right and regulated the farmland-collateral loans. Seeking an appropriate degree of regulation, the shogunate first banned foreclosure and invited a credit shrink. Then the shogunate introduced legislation to legalize foreclosure of pledged farmland as clarifying the rights of borrowers. The regulation asymmetrically lowered interest rates for timely repayment.

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  • Mandai, Yu & Nakabayashi, Masaki, 2018. "Stabilize the peasant economy: Governance of foreclosure by the shogunate," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 305-327.
    • Handle: RePEc:eee:jpolmo:v:40:y:2018:i:2:p:305-327
    DOI: 10.1016/j.jpolmod.2018.01.007
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    2. Yutaka Arimoto & Tomoko Hashino & Masaki Nakabayashi & Tetsuji Okazaki & Osamu Saito & Yoshihiro Sakane & Kaoru Sugihara, 2024. "The State of Economic History in Japan," CIRJE F-Series CIRJE-F-1231, CIRJE, Faculty of Economics, University of Tokyo.
    3. Nakabayashi, Masaki, 2019. "From family security to the welfare state: Path dependency of social security on the difference in legal origins," Economic Modelling, Elsevier, vol. 82(C), pages 280-293.

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    More about this item

    Keywords

    Farmland-collateral loans; Farmland foreclosure; Free labor; Peasant ownership; Early modern Japan;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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