ABSTRACT
This paper will attempt to explain the role of the rapidly expanding foreign trade in the striking economic development of Japan since the Meiji era (1867), and at the same time to analyse its various aspects, e.g. the causes of high export growth rate, changes in the commodity composition of trade, the effect of changes in the terms of trade, etc. Especially important in the understanding of the above, is the fact that the Japanese export growth rate was among the highest in the world not only in the post-war period but also in the pre-war period. This raises an interesting problem: to what extent (relative to other factors) the expansion of foreign trade has been responsible for Japan's economic development and whether domestic demand or foreign demand has played the major role. 287 However, as will be discussed below, it is our opinion that the expansion of the export industry has had the leading part. This is one of the chief conclusions obtained from the analysis in this paper, and to that extent the growth potential of her exports must be regarded as important in the understanding of Japan's economic development.
