ABSTRACT
We are faced with the twofold puzzle of why the Bank of Japan forced banks to create the bubble through excessive lending and why suitable policies to create a recovery during the 1990s were not pursued while government attempts at stimulating the economy were disabled. Change in personnel, such as the publicized change of governors in 1989 or 1994, cannot explain this. We found that the same two people were in charge in both the second half of the 1980s and most of the 1990s, namely, Mieno and Fukui. Why did they implement such policies?
