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Japan’s monetary mobilization for war

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Chapter Summary

Japan's wars at the turn of the twentieth century were not cheap. Paying for war is normally a function of a state's financial policy. Nevertheless, the central bank's monetary policy also plays an important role. This chapter examines the demand side of the war expenditures, and studies the relation between monetary policy and spending during the war. To understand the nature of military expenditures, it is necessary to compare budgets in times of war and of peace. The chapter studies the impact of war spending on Japanese monetary policy, and also pays attention to bridge finance, encourage domestic loan subscription, and support the currency. To put Japan into perspective, the chapter reviews the economic and military strengths of the great powers at the turn of the twentieth century.

Keywords: central bank; Japanese monetary policy; military expenditures; war expenditures

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