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Capital as Will and ImaginationSchumpeter's Guide to the Postwar Japanese Miracle$
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Mark Metzler

Print publication date: 2013

Print ISBN-13: 9780801451799

Published to Cornell Scholarship Online: August 2016

DOI: 10.7591/cornell/9780801451799.001.0001

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The Turning Point

The Turning Point

(p.158) 9 The Turning Point
Capital as Will and Imagination

Mark Metzler

Cornell University Press

This chapter offers some interim conclusions about the successes of inflationary reconstruction, the end of the great inflation, and the beginnings of the “Schumpeterian boom” that followed. It discusses how the outbreak of the Korean War in 1950 resulted in international economic recovery. This was also when full economic stabilization came to Japan, fueled by Korean War spending by the United States. By the end of 1950, Japan had regained its position as the world's number one exporter of cotton cloth. The government's store of foreign-exchange currency more than doubled. Imports remained highly constrained. Price levels rose sharply, especially for producer goods. Against this overall movement, the relative stabilization of food prices adversely affected farmers, who on the whole had gained greatly in the inflation years. By the same token, it stabilized the livelihoods of consumers.

Keywords:   Japan, postwar economy, economic boom, economic recovery, Korean War

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