Discussion Papers 2016

CIRJE-F-1005	"Regional Business Cycle and Growth Features of Japan"
Author Name	Inaba, Masaru and Keisuke Otsu
Date	March 2016
Full Paper	PDF File
Remarks

Abstract
We study the features of regional business cycles and growth in Japan. We nd evidence of unconditional convergence over the 1955- 2008 period. For the 1975-2008 period, we nd evidence of convergence conditional on TFP gap, population growth, private investment rate and TFP growth. We also nd that the consumption-output correlation puzzle exists, which implies that the idiosyncratic income shocks are not shared among prefectures and regions. Financial market distortions are important in accounting for the low correlation of consumption across regions.
Keywords: Political connection, Democracy, Election, Firm value, Japan

Abstract

We study the features of regional business cycles and growth in Japan. We nd evidence of unconditional convergence over the 1955- 2008 period. For the 1975-2008 period, we nd evidence of convergence conditional on TFP gap, population growth, private investment rate and TFP growth. We also nd that the consumption-output correlation puzzle exists, which implies that the idiosyncratic income shocks are not shared among prefectures and regions. Financial market distortions are important in accounting for the low correlation of consumption across regions.

Keywords: Political connection, Democracy, Election, Firm value, Japan