Understanding Regional Growth Dynamics in JAPAN: Panel Cointegration Approach Utilizing The PANIC Method
AbstractThis study aims at understanding regional growth dynamics in Japan using nonstationary panel data. Since the panel unit root test does not adequately produce a detailed picture of the development of Japanese prefectures, we follow a panel cointegration approach using the PANIC method. We find 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 find that although the poor stay poor, the relative income gap will narrow substantially in the future.
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Bibliographic InfoPaper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number 243.
Length: 36 pages
Date of creation: Sep 2009
Date of revision: Jan 2011
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β-convergence; Common trends; Panel unit root test; PANIC method; Relative convergence; Japan;
Find related papers by JEL classification:
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
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- Masahiko Shibamoto & Yoshiro Tsutsui, 2011. "Note on the Interpretation of Convergence Speed in the Dynamic Panel Model," Discussion Paper Series DP2011-04, Research Institute for Economics & Business Administration, Kobe University.
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