The Intranational Business Cycle in Japan
AbstractThis paper studies the intranational business cycle - that is the set of regional (prefectural) business cycles - in Japan. One reason for choosing to examine the Japanese case is that long time series of relatively detailed data are available. A Hodrick-Prescott filter is applied to identify cycles in annual data from 1955 to 1995 and bilateral cross-correlations of prefectural GDPs are calculated for all pairs of prefectures, in our results we find fairly high cross-correlations. The paper then turns to an econometric explanation of the cross-correlation coefficients in the augmented gravity model framework. Two prefectures with similar GDPs and a shorter distance between them lead to business cycle synchronization whilst those with larger regional gaps in factor endowments (capital, labor and human capital) result in more idiosyncratic business cycle.
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Bibliographic InfoPaper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number DP2010-19.
Length: 29 pages
Date of creation: Jun 2010
Date of revision:
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Intranational business cycle; Hodrick-Prescott filter; Optimal Currency Area; Gravity Model; Heckscher-Ohlin theorem;
Other versions of this item:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-11 (All new papers)
- NEP-BEC-2010-06-11 (Business Economics)
- NEP-MAC-2010-06-11 (Macroeconomics)
- NEP-OPM-2010-06-11 (Open Economy Macroeconomic)
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- Stefano Magrini & Margherita Gerolimetto & Hasan Engin Duran, 2011. "Understanding the lead/lag structure among regional business cycles," Working Papers 2011_06, Department of Economics, University of Venice "Ca' Foscari".
- Miyazaki, Tomomi, 2013. "Fiscal Policy and Regional Business Cycle Fluctuations in Japan," Discussion Paper Series 583, Institute of Economic Research, Hitotsubashi University.
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