Public investment and business cycles: The case of Japan
AbstractThis paper examines the effect of public investment on macroeconomic fluctuations in Japan by comparing the effects of central and local government investments. Impulse response functions show that central government investments slightly but persistently stimulate industrial production, while local government investments have no positive impact on business cycles. In terms of policy effectiveness, these results suggest that the Japanese government should not employ local public sector investments as a policy instrument for economic stabilization.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Asian Economics.
Volume (Year): 20 (2009)
Issue (Month): 4 (September)
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Web page: http://www.elsevier.com/locate/asieco
Public investment Stabilization policy in Japan Structural vector auto regression;
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