Masahiko Shibamoto (Research Institute for Economics and Business Administration, Kobe University) Yoshiro Tsutsui (Graduate School of Economics, Osaka University) Chisako Yamane (Faculty of Economics, Niigata Sangyo University)
Abstract
This study aimed at understanding regional growth dynamics in Japan using nonstationary panel data. Since the panel unit root test did not adequately produce a detailed picture of the development of Japanese prefectures, we followed a panel cointegration approach using the PANIC method. We found that there is one common source of growth to which prefectures attach different long-run weights and that the per capita real income of follower-prefectures will catch up to that of leader-prefectures. Using the concept of relative convergence, we found that although the poor stay poor, the relative income gap will narrow substantially in the future.
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Publisher Info
Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number
243.