Interregional Payment Balances and Regional Economy

Abstract

Interregional payment balances is considered indicator of development and also that of inland trade balances among regional ecomomies, applying the concept of International payment balances.Dividing Japanese regions into four groups-(1) the three megalopolices (Tokyo, Osaka, and Nagoya), (2) their surrounding areas, (3) the borderlands (Hokkaido, Kyushu, etc.), (4) and the other areas the defferences in interregional payment balances among the group, which are placed in the order of 1>2>4>3, have been found to have recently expanded, although the excessive surplus of the three megalopolices has slightly declined.Interregional payment balances have positive correlations with the averages of income and the industrialization, and negative correlations with the expenditures of the national finance: on the other hand, the averages of income have positive correlations with Interregional payment balances and the industrialization, and negative correlations with the expenditures of the national finance. Therefore, deficit areas by the indicator can be said to have low standards of income and industry, and be dependent on the national finance. The differences among Interregional payment balances show the “inbalanced” levels of the regional economics.We suggest a way for solving the problem of inbalances, pointing out the great need to reduce the multiplier factors with the following measures:1. lowering “spill-over effect” by reconstructing the economic structures emphasing industries2. reducing “investment leakage” by improving the policies for hightening eco nomic effects of public investments provided by the national finance There might be specific policies of the government to emphasize on investing in certain areas by casting divided roles to regions, however, the indicator of Interrogional payment balances gives us a criterion on basic judgement for the regional policies. © 1990, JAPAN SECTION OF THE REGIONAL SCIENCE ASSOCIATION INTERNATIONAL. All rights reserved.