We have shown that Barro’s neutrality does not hold perfectly in Japan (chapter 2) and there exists a serious concern with the sustainability of fiscal policy in the 1990s (chapter 4). Hence, it is important to reduce government deficits in the long run.
KeywordsCentral Government Public Investment Labor Income Public Debt Dynamic Game
Unable to display preview. Download preview PDF.
- Alesina, A. and A. Drazen, 1991, Why is stabilization delayed? American Economic Review 81, 1170–1188.Google Scholar
- Becker, G.S. and C.B. Mulligan, 1998, Deadweight costs and the size of government,NBER working paper #6789.Google Scholar
- Doi, T., 1998, Is Japanese local finance really centralized?: From a viewpoint of the revenue-expenditure nexus, Institute of Social Science Discussion Paper Series F-76, University of Tokyo.Google Scholar
- Ihori, T. and J. Itaya, 1998, A dynamic analysis of fiscal reconstruction, mimeo.Google Scholar
- Pantula, S.G., G. Gonzalez-Farias and W.A. Fuller, 1994, A comparison of unit-root test criteria, Journal of Business and Economic Statistics 12, 449–459.Google Scholar
- Velasco, A., 1997, A model of endogenous fiscal deficits and delayed fiscal reforms, NBER Working paper #6336.Google Scholar