Synchronization of Prefectural Business Cycles in Japan 1978-2018

Two decades of studies have found significant regional differences in the timing of transitions in national business cycles and their durations. Earlier studies detect regional synchronization during business cycle expansions and contractions in Europe (Grayer, 2007), the U.S. (Hamilton and Owyang, 2012; Chung, 2016), and Japan (Wall, 2007). We investigate those findings more comprehensively for Japan. We draw upon business cycle data spanning 1978-2018 for all 47 Japanese prefectures and measure synchronization between them using a method prominent in nonlinear sciences but infrequently applied in business cycle studies. Our findings confirm that synchronization in Japan's prefectural business cycles increased during contractions and decreased during expansions throughout the period studied.