Overview
- Investigates the emergence of strong money demand in wartime Japan and its reemergence in contemporary Japan
- Constructs an augmented fiscal/monetary theory of price level by examining strong money demand in the above two periods
- Explains puzzling monetary and fiscal phenomena observed in contemporary Japan
Part of the book series: Advances in Japanese Business and Economics (AJBE, volume 28)
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Table of contents (6 chapters)
Keywords
- Strong money demand
- Wartime finance
- Price controls
- Black markets
- Quantity theory of money
- Fiscal theory of price level
- Fiscal sustainability and unsustainability
- Zero interest rate policy
- Quantitative and qualitative monetary easing
- Mild inflation, galloping inflation, and hyperinflation
- Mild deflation
About this book
This book theoretically and empirically investigates the emergence of strong money demand in wartime Japan (1937–1945), its disappearance after the end of the war (1945–1949), and the reemergence of strong money demand in contemporary Japan (from 1995 to the present) in terms of the effects on fiscal activities and the price level. An augmented fiscal/monetary theory of the price level is constructed from a close examination of the strong money demand present in these periods. Then, profoundly puzzling phenomena such as mild deflation despite monetary expansion, low long-term interest rates despite fiscal unsustainability, and weak aggregate demand despite near-zero rates of interest, all of which are actually being observed in contemporary Japan, can now be interpreted in line with the above augmented theory. In the present, strong money demand at near-zero rates endows the Japanese government with maximum fiscal flexibility. However, if it disappeared for some reason, prices wouldsurge to the quantity theory of money level, and fiscal sustainability would have to be restored. In the future, alternative currency units issued by private banks might carry out a purge of such strong demand for the yen.
Authors and Affiliations
About the author
Bibliographic Information
Book Title: Strong Money Demand in Financing War and Peace
Book Subtitle: The Cases of Wartime and Contemporary Japan
Authors: Makoto Saito
Series Title: Advances in Japanese Business and Economics
DOI: https://doi.org/10.1007/978-981-16-2446-9
Publisher: Springer Singapore
eBook Packages: Economics and Finance, Economics and Finance (R0)
Copyright Information: Springer Nature Singapore Pte Ltd. 2021
Hardcover ISBN: 978-981-16-2445-2Published: 17 June 2021
Softcover ISBN: 978-981-16-2448-3Published: 18 June 2022
eBook ISBN: 978-981-16-2446-9Published: 17 June 2021
Series ISSN: 2197-8859
Series E-ISSN: 2197-8867
Edition Number: 1
Number of Pages: XXIV, 204
Number of Illustrations: 44 b/w illustrations, 8 illustrations in colour
Topics: Macroeconomics/Monetary Economics//Financial Economics, Economic History, Economy-wide Country Studies