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Financing Japan's World War II Occupation of Southeast Asia

  • Gregg Huff (a1) and Shinobu Majima (a2)

This article analyzes how Japan financed its World War II occupation of Southeast Asia, the market-purchased transfer of resources to Japan, and the monetary and inflation consequences of Japanese policies. Occupation was financed principally by printing large quantities of money. While some Southeast Asian countries had high inflation, hyperinflation hardly occurred because of a sustained transactions demand for money and because of Japan's strong enforcement of monetary monopoly. Highly specialized Southeast Asian economies and loss of Japanese merchant shipping limited resource extraction.

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Earlier versions of this article were presented at seminars at Gakushuin University, the University of Tokyo, and the Asia Research Institute and during 2012 at the Economic History Society Conference, the Norges Bank's Bicentenary Project Workshop, the European Business History Association Conference, and the Economic History Association Meeting. Thanks to seminar and conference participants for many helpful comments and to Michael Bordo, Peter Drake, Michael Edelstein, Rui Esteves, Øyvind Eitrheim, Cambell Leith, and Avner Offer. We owe a particular debt of gratitude to Andrew Bain and Nicholas Snowden whose comments and suggestions fundamentally shaped the article; to the editor of this JOURNAL who made exceptionally detailed and valuable comments; and for the many suggestions and helpful pointers of three anonymous referees. Shingo Kakino and Sarah Womack provided outstanding research assistance. Huff gratefully acknowledges support and funding from ESRC grant (RES-062-23-1392), which made this article possible.

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