We examine the impact of the Gold Standard on Japan's integration into global capital markets. We show that in the pre-Gold Standard period (1870-96) capital inflows into Japan were small, and yields on Japanese debt uncorrelated with those on sovereign debt of other developing countries. After adopting the Gold Standard in 1897, Japan enjoyed substantial capital inflows, as well as a dramatic change in bond yields, which began to move together with yields on other bonds traded in London. We also find that the Gold Standard lowered the risk premium on Japanese government bonds, and conclude that the Gold Standard was instrumental for Japan's ability to access foreign capital markets.
|Translated title of the contribution||Economic Institutions and the Integration of International Capital Markets: The Case of Japan during the Meiji Era. With English summary|
|Number of pages||19|
|State||Published - 1 Jan 1999|
Bibliographical notePublished in a special issue of Economie Internationale 78, 2:
A Century of International Financial Architecture.
- Financial Aspects of Economic Integration
- Current Account Adjustment; Short-term Capital Movements
- International Financial Markets
- Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems