Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/210025 
Year of Publication: 
2013
Series/Report no.: 
Working Paper No. 2013/02
Publisher: 
Norges Bank, Oslo
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.
Subjects: 
Japan
Greater East Asian Co-Prosperity Sphere
Southeast Asia
war
financial and macroeconomic crises
resource transfer
occupation costs
bilateral clearing arrangements
seigniorage
hyperinflation
JEL: 
G01
N15
N45
P44
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-716-2
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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