Financing Japan’s World War II occupation of Southeast Asia

Gregg Huff and Shinobu Majima
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Shinobu Majima: Faculty of Economics, Gakushuin University

No 2013/02, Working Paper from Norges Bank

Abstract: This paper analyzes how Japan financed its World War II occupation of Southeast Asia, the transfer of resources to Japan, and the monetary and inflation consequences of Japanese policies. In Malaya, Burma, Indonesia and the Philippines, the issue of military scrip to pay for resources and occupying armies greatly increased money supply. Despite high inflation, hyperinflation hardly occurred because of a sustained transactions demand for money, because of Japan's strong enforcement of monetary monopoly, and because of declining Japanese military capability to ship resources home. In Thailand and Indochina, occupation costs and bilateral clearing arrangements created near open-ended Japanese purchasing power and allowed the transfer to Japan of as much as a third of Indochina's annual GDP. Although the Thai and Indochinese governments financed Japanese demands mainly by printing large quantities of money, inflation rose only in line with monetary expansion due to money's continued use as a store of value in rice-surplus areas.

Keywords: War; Financial and macroeconomic crises; Resource transfer; Occupation costs; Bilateral clearing arrangements; Seigniorage; Hyperinflation; Greater East Asian Co-Prosperity Sphere; Japan; Southeast Asia (search for similar items in EconPapers)
JEL-codes: G01 N15 N45 P44 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2013-01-16
New Economics Papers: this item is included in nep-his and nep-sea
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Citations: View citations in EconPapers (7)

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https://www.norges-bank.no/en/news-events/news-pub ... pers/2013/WP-201302/

Related works:
Journal Article: Financing Japan's World War II Occupation of Southeast Asia (2013)
Working Paper: Financing Japan's World War II Occupation of Southeast Asia (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2013_02

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