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Regional Inflation and Consumption Behaviors

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  • Nagayasu, Jun

Abstract

This paper analyzes empirically interaction between the inflation rates across regions using consumption data on services and the geographical location of regions in Japan. The service sector has been expanding rapidly in terms of its contribution to the total economic activity in advanced countries, and further demographic changes have accelerated its speed in Japan over recent decades. After providing a theoretical relationship between regional inflation and consumption of non-tradable goods, we find evidence that different consumption patterns of services across regions explain heterogeneity in regional inflation in Japan.

Suggested Citation

  • Nagayasu, Jun, 2015. "Regional Inflation and Consumption Behaviors," MPRA Paper 68566, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:68566
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    File URL: https://mpra.ub.uni-muenchen.de/68566/1/MPRA_paper_68566.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Regional inflation; non-tradable goods; services; demographic changes; spatial models;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F3 - International Economics - - International Finance
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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