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Abstract

Vol. 51, No. 2, pp. 136-151 (2000)

“Regional Factor Inputs and Convergence in Japan -How Much Can We Apply Closed Economy Neoclassical Growth Models?-”
Kyoji Fukao (The Institute of Economic Research, Hitotsubashi University), Ximing Yue (The Institute of Economic Research, Hitotsubashi University)

By compiling prefectural data of factor inputs, such as private and public capital stock, employment by education level and sex, and data of interprefectural factor movements, such as migration, private capital flows, government income transfers, we examined the mechanism of interregional convergence in Japan since 1955. We found that the convergence mechanism in Japan was completely different from that of closed economy neoclassical growth models. Through estimation of transcendental logarithmic production function, it is found that migration and active accumulation of public capital in rural areas were the main causes of the convergence. Catch-up in production technology and reduction of the human capital gap also contributed to the convergence.