This paper examines the leads and lags of the prefectural business cycles against the national one by utilizing the prefectural composite index (CI), which are constructed with four common monthly economic indicators. The newly constructed CPBI (Cumulative Prefectural Business Index) based upon 47 prefectural CI can trace the past national business cycle turning points fairly well and, if modified suitably, can pinpoint the peak of the most recent Japanese business cycle. The paper also analyzes the widening differences among prefectures measured by the growth rates, over business cycles, of the quantitatively comparable prefectural CIs.
