Template-type: ReDIF-Paper 1.0
Author-Name: Gregg Huff
Author-Workplace-Name: Pembroke College, University of Oxford
Author-Email: gregg.huff@pmb.ox.ac.uk
Author-Name: Shinobu Majima
Author-Workplace-Name: Faculty of Economics, Gakushuin University
Author-Email: shinobu.majima@gakushuin.ac.jp
Title: Financing Japan’s World War II Occupation of Southeast Asia
Abstract: This paper analyzes how Japan financed its World War II occupation of Southeast Asia, 
the transfer of resources to Japan, and the monetary and inflation consequences of Japanese policies. 
In Malaya, Burma, Indonesia and the Philippines, the issue of military scrip to pay for resources and 
occupying armies greatly increased money supply. Despite high inflation ,hyperinflation hardly occurred 
because of a sustained transactions demand for money, because of Japan’s strong enforcement of monetary 
monopoly, and because of declining Japanese military capability to ship resources home. In Thailand and 
Indochina, occupation costs and bilateral clearing arrangements created near open-ended Japanese purchasing 
power and allowed the transfer to Japan of as much as a third of Indochina’s annual GDP. Although the Thai 
and Indochinese governments financed Japanese demands mainly by printing large quantities of money, inflation 
rose only in line with monetary expansion due to money’s continued use as a store of value in rice-surplus areas.
Classification-JEL: G01, N15, N45, P44
Keywords: war, financial and macroeconomic crises, resource transfer, occupation costs,
bilateral clearing arrangements, seigniorage, hyperinflation, Greater East Asian Co-Prosperity
Sphere, Japan, Southeast Asia
Length: 43 pages
Creation-Date: 2012-10-31
Number: _109
File-URL: http://www.economics.ox.ac.uk/materials/papers/12457/huffmajima109.pdf
File-Format: application/pdf
Handle: RePEc:nuf:esohwp:_109