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A1704
Topic: Title: Regional growth and business cycles in Japan Authors:  Yoshihiro Ohtsuka - Tohoku Gakuin University (Japan)
Kazuhiko Kakamu - Nagoya City University (Japan) [presenting]
Abstract: The consistency and gaps in national and regional business cycles in Japan are examined from a Bayesian point of view. The Tokyo monopolar system started in the mid-1970s, and recent descriptive statistics, such as migration and per capita income, show that the system continues, despite severe crises such as the bursting of bubbles and the Lehman shock. We explore the relationship between national and regional business cycles in the system using a spatio-temporal Markov-switching model with the Markov chain Monte Carlo method. Our empirical results show that, overall, the regional business cycle in the Kanto region, including Tokyo, is identical to the national business cycle. Moreover, we find that switches in the degree of spatial dependency occur around the turning points of business cycles, and that the degree of spatial dependency tends to be higher during a recession.