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The Intranational Business Cycle: Evidence from Japan

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  • Artis, Michael J
  • Okubo, Toshihiro

Abstract

Abstract: This paper studies the intranational business cycle - that is the set of regional (prefecture) business cycles - in Japan. One reason for choosing to examine the Japanese case is that long time series and relatively detailed data are available. A Hodrick-Prescott filter is applied to identify the cycles in annual data from 1955 to 1995 and bilateral cross-correlation coefficients are calculated for all the pairs of prefectures. Comparisons are made with similar sets of bilateral cross correlation coefficients calculated for the States of the US and for the member countries of a "synthetic Euro Area". The paper then turns to an econometric explanation of the cross-correlation coefficients (using Fisher’s z-transform), in a panel data GMM estimation framework. An augmented gravity model provides the basic model for the investigation, whilst the richness of the data base also allows for additional models to be represented.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6686.

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Date of creation: Feb 2008
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Handle: RePEc:cpr:ceprdp:6686

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Keywords: Gravity Model; Heckscher Ohlin theorem; Hodrick-Prescott filter; Intranational business cycle; Market potential; Optimal Currency Area;

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Citations

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Cited by:
  1. Jan Fidrmuc & Jarko Fidrmuc & Shuo Huang, 2013. "Whither China? Reform and Economic Integration among Chinese Regions," CESifo Working Paper Series 4220, CESifo Group Munich.
  2. Michael Artis & Toshihiro Okubo, 2009. "The UK Intranational Trade Cycle," Discussion Paper Series, Research Institute for Economics & Business Administration, Kobe University 234, Research Institute for Economics & Business Administration, Kobe University.
  3. Michael Artis & Toshihiro Okubo, 2008. "Globalization and Business Cycle Transmission," Centre for Growth and Business Cycle Research Discussion Paper Series 110, Economics, The Univeristy of Manchester.
  4. Miankhel, Adil Khan & Kalirajan, Kaliappa & Thangavelu, Shandre, 2010. "Integration, decoupling and the global financial crisis: A global perspective," MPRA Paper 22837, University Library of Munich, Germany.

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