The Role of the Central Bank in Industrialization

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Other Title
  • 工業化過程における中央銀行の役割 : 問題提起
  • 問題提起 工業化過程における中央銀行の役割
  • モンダイ テイキ コウギョウカ カテイ ニ オケル チュウオウ ギンコウ ノ ヤクワリ

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In the Meiji period, as a Latecomer in industialization, Japan had to develop her industry rapidly under the pressure of competition with the industrialized nations of the West. However, the accumulation of capital in the private sector was relatively small, and the capital market was not much developed. Under these conditions, the Bank of Japan played an important role in providing funds to the silk industry, the cotton mill industry the foreign trade, etc. and helped the growth of these important industries. The primary function of the Bank of Japan as the central bank was to control the monetary value, interest rates, and business flucations; but it also had to follow a policy to promote industries, at least for a certain period of time, in the backward nations. The note of the Bank of Japan were issued-from 50 percent to 70 percent-on the fiduciary reserve, most of which were Government bonds and private bills. Private bills were mostly IOU's, not commercical notes. To put it differently, the Bank of Japan promoted the growth of industries through the issues of notes based on public and private debts. These are the characteristics of the role of the Bank of Japan in the Japanese industrialization. It is the intention of the writer to compare the above situation with those of other countries, and reexamine the role of the central bank in industrialization.

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