Evolutionary dynamics of regional inequality and economic growth in post-industrial Japan
摘要
This paper responds both to the renewed interest in the relationship between macroeconomic growth and economic inequality and to calls for rigorous empirical research on the dynamics of regional inequality within the context of evolutionary economic geography. We focus on the long-term trajectories of prefecture-level regional inequality and national economic growth in Japan between 1957 and 2013. Rather than imposing strong a priori assumptions about the relationship between regional inequality and economic growth, we adopt a conventional Vector Autoregressive (VAR) modelling methodology to bring data to bear on the theoretical conjectures embodied in Williamson’s inverted-U hypothesis. Our findings indicate a positive contemporaneous relationship between national economic growth and regional inequality throughout the study period, suggesting that the hypothesized positive relationship between growth and inequality persists into the “post-industrial” phase of a national economy. We also find that economic growth in the previous year is associated with an increase in current regional inequality, while there is no evidence that rising inequality precedes national economic growth, even in the most recent decades, thereby challenging the claim that inequality must be “tolerated” to facilitate collective growth. Future research may provide further insights by, for example, examining the sensitivity of these findings to different geographical scale of analysis.