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Financial Stabilization in Meiji JapanThe Impact of the Matsukata Reform$
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Steven J. Ericson

Print publication date: 2020

Print ISBN-13: 9781501746918

Published to Cornell Scholarship Online: May 2020

DOI: 10.7591/cornell/9781501746918.001.0001

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From “Ōkuma Finance” to “Matsukata Finance,” 1873–1881

From “Ōkuma Finance” to “Matsukata Finance,” 1873–1881

(p.9) 1 From “Ōkuma Finance” to “Matsukata Finance,” 1873–1881
Financial Stabilization in Meiji Japan

Steven J. Ericson

Cornell University Press

This chapter examines the transition from the expansionary policies of Ōkuma Shigenobu to the contractionary ones of Sano Tsunetami as background to the Matsukata reform, which in large measure ended up combining his predecessors' approaches. It shows the critical difference between the Ōkuma and Matsukata approaches to financial policy. Ōkuma sought to engineer a rapid currency reform using the proceeds from overseas bond issuance while applying the savings from austerity to continue the expansionary economic policies he had pursued as finance minister. The adoption of his new foreign-borrowing scheme in the summer of 1881 signaled a softening of official commitment to fiscal retrenchment. Matsukata intended to continue the Sano initiatives with the exception of borrowing abroad and founding a British-style central bank. Yet in practice he would diverge from much of the Sano austerity program in ways that differed from both classical and neoliberal orthodoxy.

Keywords:   Ōkuma Shigenobu, Sano Tsunetami, financial policy, currency reform, austerity program, expansionary economic policies, foreign-borrowing scheme, central bank

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