Dynamic Macroeconomic Analysis for Local Government Deficit

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This research analyzed the effects of fiscal policy by local governments on the local economies from the view of both theoretical approach and empirical approach.Regarding the former approach, "Local Economies and Local Governments" by Takeucbi and "Local Economies and Municipal bonds" by Yanagihara grasped the relationship between the industrial structure of local economies and public finance of local governments and showed the direction of public finance toward the future. "Efficiency of Local Public Finance and Decentralization" by Takeuchi succeeded in attacking the problem of the merger of local governments from the viewpoint of the efficiency of public administration.For the latter approach, on the other hand, "Welfare Analysis for the Source-based Capital Income Taxation" and "Welfare Analysis for the Residence-based Capital Income Taxation" by Sakamoto advanced dynamic macroeconomic analysis to show how such taxation by the local governments affects both the welfare level of the region's welfare and that of the other one. In the same way, Sakamoto, Takeuchi and Yanagihara, in "The Effects of Local Public Finance on Labor Migration," expanded Sakamoto's analyses and made it possible to analyze the effects of fiscal pocicies of local governments under the existence of labor mobility.