AbstractIn interwar Japan the gold standard became conflated with austerity but, historically, there had been no such connection in Japan. Nineteenth and twentieth century British rhetoric made the gold standard an adjunct of deflation, but that was a British fixation, not Japanese. In addition to being highly political, this late-nineteenth century understanding and use of the gold standard was based on, and promoted, expansionary monetary policy and long-term development. In the interwar

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... d this changed. Japanese governments chose austerity under the guise of complying with international rules and standards and turned the expansionary gold standard of the pre-World War I years into a deflationary system of austerity, depression, and, ultimately, nationalist reaction.