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Public investment, economic stabilization, and regionally discordant business cycles in Japan: Toward an effective fiscal stimulus

Author

Listed:
  • Yoshito Funashima

    (Faculty of Economics, Aoyama Gakuin University)

Abstract

This paper examines the cyclicality of Japanese public investment for the prefectural-level business cycles as well as for the aggregate ones. We estimate the public investment reaction function, in which regional business cycles are explicitly discriminated from national business fluctuations using both the aggregate time series data and prefectural panel data during the 1990s. We uncover a particular public investment inclination such that policymakers tend to pay attention only to the macroeconomic variables, whereas they disregard individual situations of the regional economies. This means that there is room for policymakers to stabilize the regional business cycles, while attaining the resultant macroeconomic stabilization as well.

Suggested Citation

  • Yoshito Funashima, 2013. "Public investment, economic stabilization, and regionally discordant business cycles in Japan: Toward an effective fiscal stimulus," Economics Bulletin, AccessEcon, vol. 33(2), pages 931-943.
    • Handle: RePEc:ebl:ecbull:eb-12-00595
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    File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I2-P89.pdf
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    Citations

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    Cited by:

    1. Tomomi Miyazaki & Haruo Kondoh, 2017. "Local Public Investment and Regional Business Cycle Fluctuations in Japan," Economics Bulletin, AccessEcon, vol. 37(1), pages 402-410.
    2. 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.

    More about this item

    Keywords

    public investment; stabilization; regional business cycles;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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