Regional Dynamics in Japan: A Reexamination of Barro Regressions

Cross-section regressions, so-called “Barro regressions,” have been widely used in world and regional income data to test whether convergence takes place. This paper applies alternative methodologies, a time series test and a Markov chain model, to Japanese prefectural data and reexamines the results of J. Barro and X. Sala-i-Martin (1992,J. Japan. Int. Econ.6, 312–346). These methodologies show that the hypothesis of convergence as “catching up” does not hold for Japanese prefectural data. Through analyses similar to those of Barro and Sala-i-Martin, Markov chain models are shown to be more informative than cross-section regressions about the evolution of cross-section data.J. Japan. Int. Econ., March 1999,13(1), pp. 61–72. ECO/CS3, OECD, 2 rue André-Pascal, 75775 Paris Cedex 16, France.Copyright 1999 Academic Press.Journal of Economic LiteratureClassification Numbers: C21, C22, C23, E32, E37, O41.