Abstract
Noting a stark albeit subtle difference in frequency bands between business and election cycles, this paper utilizes a band - pass filter approach to disentangle Japanese public investment into several underlying components. To the extent that Japan is concerned, we find that public investment strongly exhibits the oft - alleged counter - cyclical pattern and latent political noise possibly weakens the government’s counter - cyclical stance. In particular, it is suggested that in the period from 1974:Q1 to 2001:Q1 (from the first oil crisis to the start of the Koizumi administration), the House of Councilors elections generally influenced the government to manipulate (increase) public investment, thereby overriding (diminishing) the otherwise strong counter - cyclical pattern of public investment.
