Mr. Narvekar, economist in the Far Eastern Division, is a graduate of Bombay University and of Columbia University.
Goods and services, donations, and capital movements other than changes in reserves and related items.
Between 1947 and 1950 the increases in reserves were due to large receipts of aid from the United States.
However, before making the fourth purchase, equivalent to US$61 6 million, Japan repurchased NI 22.2 billion from the Fund with a payment of US$61.6 million. Its net purchases of foreign currency therefore did not exceed $62.4 million, and Fund holdings of yen did not exceed the Japanese quota. In 1955, Japan repurchased yen from the Fund by the payment of U.S. dollars to restore Fund holdings of yen to 75 per cent of the Japanese quota.
S. Tsuru, Japan’s Economy—Present and Future (Tokyo, Japan Institute of Pacific Relations, 1950), pp. 4–5.
Korea, Kwantung, Manchuria, and Taiwan only. Other empire countries and leased and mandated territories are excluded. The figure relates to 1937–38.
This reliance on the dollar area for essential imports is a partial explanation of Japan’s “dollar problem” in the postwar years, which has been veiled, of course, by special government receipts, which are almost entirely in the form of U.S. dollars.
For example, raw cotton purchases are being shifted from the United States to India and Pakistan, iron ore to India and Malaya, and rice to Southeast Asia.
H. Tyszynski, “World Trade in Manufactured Commodities, 1899–1950,” Manchester School of Economic and Social Studies (Manchester), Vol. 19 (1951), pp. 272–304.
The Economic Counsel Board, known earlier as the Economic Stabilization Board and at present as the Economic Planning Board, is a Department of the Japanese Government.
Economic Counsel Board, Economic Survey of Japan, 1952–53 (Tokyo, 1953), p. 25.
See E. C. Hutchinson, inflation and Stabilization in Postwar Japan (Ann Arbor, University Microfilms, 1954).
Economic Stabilization Board, Economic Survey of Japan, 1951–52 (Tokyo, 1952), pp. 68 and 80; Economic Counsel Board, Economic Survey of Japan, 1952–63 (Tokyo, 1953), p. 110.
Economic Stabilization Board, Economic Survey of Japan, 1950—51 (Tokyo, 1951), p. 8.
Thus these were, in fact, loans in domestic currency although they were called foreign exchange loans.
Legislation empowering the financial authorities to introduce a system of cash reserve requirements for banks was enacted in May 1957. However, the system has not yet been put into effect.
These “higher rates” were consolidated in a single rate in March 1957.
The bank rate is quoted in Japan in terms of sen (one hundredth of a yen) per day. The rate of 5.84 per cent is converted to an annual basis from 1.6 sen per day.
From the Oriental Economist (Tokyo), March 1956, p. 115.
Maximum limits for rates on commercial bank loans are fixed by law; but loans of less than ¥ 1 million or for periods longer than a year are exempt from regulation. In June 1954, the second higher rate of the Bank of Japan for the rediscount of first-class commercial bills was 839 per cent, while the commercial bank rate for discounting them was 8.03 per cent or less.
See Ragnar Nurkse, “The Relation Between Home Investment and External Balance in the Light of British Experience, 1945–55,” Review of Economics and Statistics (Cambridge, Mass.), Vol. 38 (1956), pp. 121–54.
The quota was further reduced to 3 per cent at the beginning of 1957.
As far as the possibility of raising output in the short run by increasing expenditures is concerned, an economy with disguised unemployment is similar to one at full employment. See V.K.R.V. Rao, “Investment, Income and the Multiplier in an Underdeveloped Economy,” Indian Economic Review (Delhi), Vol. 1, No. 1, 1952.
The index on which this comparison is based is not completely satisfactory since the employment data used in its compilation relate only to establishments employing more than 30 workers while the production data relate to all establishments. It is found, however, that a broadening of the employment series does not give substantially different results. There is, moreover, corroborating evidence in some statistical studies indicating a reduction in the number of man-hours required per unit of output and also in the consumption of raw material and energy.
“… production was upped measurably in some industries by a slight touching up of plant or process.… For example, a stripping mill’s capacity was trebled merely by installing a roll stand and a cutting machine.” Economic Planning Board, Economic Survey of Japan, 1955–56 (Tokyo, 1956), p. 8.
A partial explanation of this may lie in the more than proportionate increase during 1955 in the demand for imports by the United States; exports to the United States form a larger proportion of Japan’s total exports than of the total exports of any other leading industrial country. It must again be noted, however, that while total U.S. imports rose by 11 per cent in 1955 and its imports of manufactured goods by 20 per cent, Japanese exports to the United States increased by about 62 per cent. Further, while total U.S. imports in 1954 were lower than in 1953, U.S. imports from Japan were 20 per cent higher.
See R. F. Harrod, “The British Boom, 1954–55,” Economic Journal (London), Vol. 66 (1956), pp. 1–16.