Development of a Regional DSGE Model in Japan: Empirical Evidence of Economic Stagnation in the Kansai Economy

Abstract

Using a dynamic stochastic general equilibrium model, this study empirically examines Japan’s Kansai Region to ascertain causes of its long-run economic stagnation. Simulations and the empirical investigation demonstrate that stagnant private residential and equipment investments and productivity persistency are structural problems responsible for Kansai’s unique economic fluctuations.

Mitsuhiro Okano

Associate Professor of Economics

My research interests include monetary policy, new open economy macroeconomics and regional economics.