Economic Growth and Urbanization: A Study of Japan

Abstract

This paper describes some results obtained from simulating a computable general equilibrium model calibrated with 1960 data for Japan. Of the two closures used, the Keynesian type, which assumes unutilized resources, performs better than the neoclassical closure, which assumes full employment of all factors of production. In other words, Japanese economic growth in the 1960s may be characterized by the decisions of investors who regarded the supply of quality labor as virtually unlimited. Spatial aspects of population shifts have a significant bearing on macro growth potentials if social capital demands are spatially differentiated.