Japan's Export Bonanza from the Silver Standard, 1885-97: Myth or Reality?

Shinji Takagi

No 2024-23, AGI Working Paper Series from Asian Growth Research Institute

Abstract: The paper uses the panel data methodology to reassess the scholarly consensus in the economic history literature ("silver-standard myth") that attributes Japan's export boom of the late nineteenth century to the country's fortuitous adoption of the silver standard. The paper, based on the annual panel data of Japanese trade flows with five gold- and five silver-standard countries for 1885-97, finds that the growth of exports was consistently higher for silver- than for gold-standard destinations (though the difference was statistically not significant), refuting the near-consensus view that the falling relative price of silver stimulated exports to gold-standard countries. This finding should be both logical and intuitive. First, given the higher rate of inflation in Japan, the yen's real exchange rate did not depreciate during the silver-standard era. Second, Japan, as a small open economy, was a price-taker in world markets. The expansion of Japanese exports can best be understood as resulting from Japan's increased capacity to produce goods, a surplus of which the country was able to sell at given world prices.

Keywords: silver standard; Japan and the silver standard; early industrialization in Japan; impact of the silver standard on Japanese trade (search for similar items in EconPapers)
JEL-codes: E42 F33 N15 (search for similar items in EconPapers)
Date: 2024-11
New Economics Papers: this item is included in nep-fdg, nep-his and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:agi:wpaper:02000146

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