We test the hypothesis that trade creditors are relationship lenders using SME data from Japan. We find that the validity of the relationship lending hypothesis depends on the relative bargaining power between the buyer and sellers. Specifically, we find evidence that longer buyer–seller...

We show that the optimal inflation target imposed on a discretionary central bank varies with the extent of fiscal decentralization. Our analysis compares two fiscal regimes for local government bond management: the partially decentralized (PD) regime where the central government determines the...