Money on the road to empire: Japan's adoption of gold monometallism, 1873–97

In the macro-economic literature, Japan has at several times been treated as a canonical example of why countries joined the gold standard. On the one hand, the country has been linked to the argument that there exists a relationship between the gold standard and lowered borrowing costs; on the other hand, it has been discussed as motivated by a desire to expand its trade with gold standard countries. This article argues against both strands in the literature, and argues for a third interpretation. It demonstrates that the specificities of Japan's gold standard reveal a concern with ‘original sin’, or the impossibility of raising foreign loans in Japan's own currency, and explains that there were grave costs to gold standard adoption.