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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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The Matsukata Reform as “Expansionary Austerity”

The Matsukata Reform as “Expansionary Austerity”

(p.135) Conclusion The Matsukata Reform as “Expansionary Austerity”
Financial Stabilization in Meiji Japan

Steven J. Ericson

Cornell University Press

This concluding chapter returns to the notion that Matsukata merged the positive and negative policies of his predecessors along liberal nationalist lines, pursuing a kind of “expansionary austerity” during the Matsukata deflation. It argues that Matsukata Masayoshi was committed to reform and modernization of Japan's fiscal and monetary systems and to encouragement of private enterprise, but not in a categorical orthodox liberal or neoliberal sense. He certainly set out to create budget surpluses through fiscal austerity. Yet he demonstrated flexibility in response to a series of unexpected developments that compelled the Finance Ministry in fact to increase government spending. As a result, the Finance Ministry was able to accumulate enough specie and money in the reserve fund to redeem a sizable portion of fiat notes, back the issue of convertible paper money by the Bank of Japan, and finance military expansion as well as enable the state to remain actively involved in the economy.

Keywords:   Matsukata Masayoshi, expansionary austerity, government spending, fiscal austerity, military expansion, Bank of Japan, Matsukata reform

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