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Public investment and business cycles: The case of Japan

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  • Miyazaki, Tomomi

Abstract

This 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.

Suggested Citation

  • Miyazaki, Tomomi, 2009. "Public investment and business cycles: The case of Japan," Journal of Asian Economics, Elsevier, vol. 20(4), pages 419-426, September.
  • Handle: RePEc:eee:asieco:v:20:y:2009:i:4:p:419-426
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    References listed on IDEAS

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    Cited by:

    1. repec:kob:wpaper:1624 is not listed on IDEAS
    2. Joao Tovar Jalles, 2015. "How Quickly is News Incorporated in Fiscal Forecasts?," Economics Bulletin, AccessEcon, vol. 35(4), pages 2802-2812.
    3. Miyazaki, Tomomi, 2013. "Fiscal Policy and Regional Business Cycle Fluctuations in Japan," Discussion Paper Series 583, Institute of Economic Research, Hitotsubashi University.
    4. Tuan Khai Vu, 2015. "Fiscal Policy News Shocks and the Japanese Macroeconomy," Working Papers 34, Meisei University, School of Economics.
    5. Tomomi Miyazaki, 2015. "Fiscal Stimulus Effectiveness in Japan: Evidence from Recent Policies," Discussion Papers 1508, Graduate School of Economics, Kobe University.
    6. Tomomi Miyazaki & Haruo Kondoh, 2017. "Local Public Investment and Regional Business Cycle Fluctuations in Japan," Economics Bulletin, AccessEcon, vol. 37(1), pages 402-410.
    7. Funashima, Yoshito, 2014. "Macroeconomic policy coordination between Japanese central and local governments," MPRA Paper 59821, University Library of Munich, Germany.
    8. repec:spr:anresc:v:60:y:2018:i:1:d:10.1007_s00168-017-0852-3 is not listed on IDEAS
    9. Anita Tuladhar & Markus Bruckner, 2010. "Public Investment as a Fiscal Stimulus; Evidence from Japan’s Regional Spending During the 1990s," IMF Working Papers 10/110, International Monetary Fund.
    10. Tomomi Miyazaki & Haruo Kondoh, 2016. "Local Public Investment and Regional Business Cycle Fluctuations in Japan," Discussion Papers 1624, Graduate School of Economics, Kobe University.
    11. Tomomi Miyazaki, 2014. "Fiscal Policy Effectiveness in Japan: Experiences from Recent Policies," Discussion Papers 1416, Graduate School of Economics, Kobe University.
    12. Funashima, Yoshito & Horiba, Isao & Miyahara, Shoichi, 2015. "Local Government Investments and Ineffectiveness of Fiscal Stimulus during Japan's Lost Decades," MPRA Paper 61333, University Library of Munich, Germany.

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