ABSTRACT
Japan's economic growth in the years from the end of Meiji to the outbreak of war with China (1937) exceeded that of the Meiji years and of any major industrial economy. The average annual growth rate of GNP was over 4 per cent, income per head growing at some 2.6 per cent, significantly greater than that of Germany (1.1 per cent), the US (0.8 per cent) and Britain (0.7 per cent). Yet Japan was badly mauled by the world recession of 1920–1, the traumatic Tokyo earthquake of 1923 and the financial and commercial crises of 1927–31. Given that the period is bounded by war and bisected by international depression, Japan's comparative advantage in the international growth stakes may well have related to the precise manner in which the economic system responded to externally produced shocks, both good and bad.
