Long-term financing becomes less available and more costly as interest rates go up because of inflation and the higher risk premiums that lenders demand as compensation for the increased uncertainty. Inflation diverts resources away from productive investments into speculative ventures in real estate and other financial assets. And in its interaction with the tax system, high inflation encourages businesses to increase debt.
A joint report was finalised in June 1990 and the Japanese government committed to instituting a public investment program totaling as much as JPY 430 trillion (roughly 100% of nominal GDP) over a ten year period.