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Before the ‘locomotive’ runs: the impact of the 1973–1974 oil shock on Japan and the international financial system

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  • Yago, Kazuhiko

Abstract

This article offers a Japanese perspective on the debate about the international financial system immediately after the first oil shock of 1973–4. Using archival records from the OECD and Bank of Japan, I analyze the three key policy issues discussed at the meetings of Working Party 3 (WP3) of the OECD: petrodollar recycling, balance-of-payments adjustments, and the management of global growth. Documents show that the Japanese approach to capital controls, exchange rate management, state-led growth orientation and international banking strategies was rather strengthened by the impact of the oil shock. By 1975 the OECD viewed Japan, together with Germany and the United States, as one of the ‘locomotives’ that would trigger a revival of economic growth in the industrialized West.

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  • Yago, Kazuhiko, 2020. "Before the ‘locomotive’ runs: the impact of the 1973–1974 oil shock on Japan and the international financial system," Financial History Review, Cambridge University Press, vol. 27(3), pages 418-435, December.
    • Handle: RePEc:cup:fihrev:v:27:y:2020:i:3:p:418-435_8
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    Cited by:

    1. Hidekatsu Kamio & Yasuko Morita, 2022. "Perception of the Balance of Payments and Monetary Policy in the Late 1960s: Focusing on the Bank of Japan's Viewpoint before and after the Monetary Policy Shift," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 40, pages 101-152, November.
    2. Hidekatsu Kamio & Yasuko Morita, 2022. "Perception of the Balance of Payments and Monetary Policy in the Late 1960s: Focusing on the Bank of Japan's Viewpoint before and after the Monetary Policy Shift," IMES Discussion Paper Series 22-E-16, Institute for Monetary and Economic Studies, Bank of Japan.

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