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The Intranational Business Cycle in Japan

  • Michael Artis

    (Swansea University (UK) and CEPR (UK))

  • Toshihiro Okubo

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

This 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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File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2010-19.pdf
File Function: First version, 2010
Download Restriction: no

Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number DP2010-19.

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Length: 29 pages
Date of creation: Jun 2010
Date of revision:
Handle: RePEc:kob:dpaper:dp2010-19
Contact details of provider: Postal: 2-1 Rokkodai, Nada, Kobe 657-8501 JAPAN
Phone: +81-(0)78 803 7036
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Web page: http://www.rieb.kobe-u.ac.jp/index-e.html

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  1. César Calderón & Alberto Chong & Ernesto H. Stein, 2003. "Trade Intensity and Business Cycle Synchronization: Are Developing Countries any Different?," Research Department Publications 4315, Inter-American Development Bank, Research Department.
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  18. Michael J. Artis & Mathias Hoffmann, 2007. "The Home Bias and Capital Income Flows between Countries and Regions," IEW - Working Papers 316, Institute for Empirical Research in Economics - University of Zurich.
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