In the field of modern Japanese financial history there are few publications on the organs of finance for everyday people, such as pawnbrokers, although there are many works on the activities of the Bank of Japan, city banks, and regional banks. Previous studies on pawnbrokers focus mainly on those located in the countryside or downtown (shitamachi) Tokyo. Most of the authors argue that the pawnbrokers charged exorbitantly high interest rates to poor people who were in straitened circumstances. To explore the reality of pawnbrokers' activities, we conducted a statistical analysis of pawnbrokers in the city of Tokyo, and a case study of a pawnbroker (Shop "T") in Shiba ward in the under-explored, near-central part of Tokyo. In our study, we used the pawn books and customers lists of 1915, 1925 and 1935. Our analysis reveals that the pawning reflected local people's lifestyle, and its change over time as their ways of living became more Westernized and they had more leisure time. Contrary to what previous works have argued, we find that pawnbrokers played an indispensable role in the daily lives of ordinary consumers by providing them with ready liquidity in small amounts in the short term by using real material objects for security.

A veteran finance minister, Takahashi Korekiyo, brought an early recovery for Japan from the Great Depression of the 1930s by prescribing a combination of expansionary fiscal, exchange rate, and monetary policies. To explore the comprehensive transmission mechanism of Takahashi's macroeconomic policy package, including the expectation channel, we construct a structural vector auto-regression (S-VAR) model with three state variables (output, price, and the inflation expectations) and three policy variables (fiscal balance, exchange rate, and money stock). Our analysis reveals that the exchange rate adjustment undertaken as an independent policy tool had the strongest effect, and that changes in people's expectations played a significant role for escaping from the Great Depression. During the second half of 1931, in particular, speculation on Japan's departure from the gold standard and the inflation that was likely to follow reversed the existing expectations: instead of expecting deflation, people began to expect inflation, months ahead of the actual departure from the gold standard. As a whole, the choice of the level of the exchange rate was crucial for changing people's expectations as well as promoting exports. (C) 2014 Elsevier Inc. All rights reserved.

This paper explores the transition of the circulation of money during the late Edo and the early Meiji period (1860s-1870s). We focus on the transition from paper money in monme (an old unit of account inherited from the Edo period) issued by feudal lords to that in yen issued by the central government as a means of exchange. To this end, we look into individual transactions appearing in accounting books of a merchant in the eastern part of Sanuki (now Kagawa prefecture). We find that, when the central government introduced the yen as the new unit of account in 1871, people in the eastern Sanuki mainly used paper money in monme issued by the feudal lord. Between 1871 and 1876, people seemingly used various types of monies such as the old monme-denominated paper money, copper coin, and the new yen-denominated paper money at the same time. In the fall of 1876, the new yen-denominated paper money suddenly prevailed in the region. Our methodology may be applicable to explore the use of money in other regions.

Japan defaulted on its public debt after the Second World War. This article addresses the question of how Japan lost its ability to sustain its public debt. We explore the sustainability of public debt in Japan before the War. We conduct statistical tests for the relationship between public debt and primary fiscal balance, and find that Japanese public debt was sustainable until 1931, and unsustainable in and after 1932. Narrative modes of analysis indicate that Japan lost its fiscal discipline because of the military's effective veto over budgetary processes and because of the absence of pressure for sound fiscal policy from international financial markets.

Many economic historians have studied macroeconomic policies during interwar Japan. Recent developments in the Japanese economy, such as long-term deflation and stagnation of economic growth, shed new light on the Japanese experience between the two world wars, and some researchers have started to apply new methods of economics and econometrics to the earlier period. This paper explores the formulation of expectations in price fluctuations in Japan during the interwar period. To this end, the paper employs quantitative analysis using commodity futures price data and narrative analysis of views expressed by market participants in business magazines at that time. This paper reveals that market participants in Japan paid great attention to differences in commodity prices between Japan and overseas markets when they formulated expectations in future price fluctuations. At the same time, they paid little attention to domestic factors such as monetary and fiscal policies as primary determinants of future price movements. This result implies that the market participants regarded the Japanese economy as a small and open economy within a fixed exchange rate system, not as a closed economy or a small and open economy within a flexible exchange rate system.

Why did policymakers adopt the gold standard? We first examine the political economy of Japan's adoption of the gold standard in 1897 by exploring the ex ante motives of policymakers as well as how the legislative decision to adopt gold won approval. We then show that joining the gold standard did not reduce Japanese interest rates or lead to a domestic investment boom. However, we find that membership in the gold standard increased Japan's exports by lowering transactions costs. Joining gold allowed Japan to tap into its growing share of global trade that was centered on the gold standard.