Regional convergence under declining population: The case of Japan |
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Institution: | 1. Graduate School of Economics, Waseda University, 1-6-1 Nishi Waseda, Shinjuku-ku, Tokyo 169-8050, Japan;2. School of Political Science and Economics, Waseda University, 1-6-1 Nishi Waseda, Shinjuku-ku, Tokyo 169-8050, Japan;1. Northeast Asian Studies College, Jilin University, China;2. Department of Economics, University of Washington, Seattle, WA, United States;1. Department of Economics, University of Innsbruck, Universitaetsstrasse 15, 6020 Innsbruck, Austria;2. Austrian Institute of Economic Research, Arsenal, Objekt 20, A-1030 Vienna, Austria;3. CESifo, Munich, Germany;1. National Graduate Institute for Policy Studies, 7-22-1 Roppongi, Minato, Tokyo 106-8677, Japan;2. Nihon University, Japan |
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Abstract: | Using regional data from Japan, we examine how population growth affected regional convergence in Japan, where population decline has become conspicuous in several regions. The basic equation in the analysis allows two distinct features that previous studies rarely explored. First, we allow the coefficient of initial per capita output to change when the growth rate of population is lower than a threshold value. Second, we allow the growth rate of population to have ambiguous effects on the growth rate of per capita output. Our estimation results confirm the convergence hypothesis in Japan. However, we find that the declining speed of convergence was more conspicuous in the regions that had negative population growth. We also find that the decline in population growth, which was irrelevant for regional economic growth before 1995, came to have harmful impacts on regional economic growth after 1995. We believe this occurred because in societies with declining populations, economies of agglomeration had more significantly disappeared in poorer regions than in richer regions. |
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Keywords: | Convergence hypothesis Population decline Economies of agglomeration |
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